Will the NHS ever give up the national insurance levy?

This week’s rise in National Insurance has caused the government enough trouble, but it faces potentially an even bigger problem next year – when it tries to prise the extra £12 billion raised in NI away from the NHS and use it to fund social care instead. The extra revenue from NI has been earmarked for the next 12 months for the NHS, to help it catch up with a backlog in routine treatments following the Covid-19 pandemic. But from April 2023 the intention is to rebrand the NI rise as the ‘Health and Social Care Levy’ – and to spend it instead on funding social care.

The trouble is, just how does a government take money away from the voracious financial beast that is the NHS? The government’s plans for NI rest on the premise that a one-off injection of cash could help clear the backlog of treatments within 12 months.

Yet that was contradicted by the NHS in February, which said that waiting times could continue to grow for another two years. Even the NHS’s existing catch-up plans appear to be slipping. The aim to eliminated waits of over two years for treatment has already slipped back to July. This week, Chris Hopson, head of NHS Providers, warns that the NHS is ‘not going as fast as we would like on backlog recovery’. One of the problems is that although high Covid infection rates are not translating into hospitalisations and deaths in the way they were earlier in the pandemic, they are causing high levels of staff absence.

As the government discovered with its extra £20 on Universal Credit payments it is politically very difficult to increase areas of public expenditure temporarily. Once you have allotted extra money you create an expectation that the money will always be there. When the government pressed ahead and ended the £20 supplement it was portrayed as a spending ‘cut’ even though the extra money was never intended as anything other than temporary help during the pandemic. It is inevitably going to find the same with catch-up money for the NHS. Come next April and NHS waiting lists are still growing, there will be intense pressure to keep the extra money flowing into NHS coffers.

What is the chance of revenue from the Health and Social Care Revenue ever finding its way into social care? Not great, I would say. The funding of social care will remain a running sore to be solved on yet another day.