Conservative party pledges extra £8bn a year for NHS

George Osborne has moved to address concerns that the Tories have abandoned compassionate Conservatism by pledging to protect the “precious” NHS with a guarantee of an £8bn increase in spending per year above inflation by 2020.

In a week that has seen signs of a slip in Tory poll ratings and claims that the Conservative party is running a highly personalised campaign against the Labour leader, Ed Miliband, the chancellor has moved to issue an “absolute commitment” to deliver the resources required by the NHS.

Writing in the Guardian, the chancellor claims the Conservatives will pledge in their general election manifesto, to be launched next week, to meet a £30bn per year funding gap by the end of the decade identified by Simon Stevens, the chief executive of NHS England.

The Stevens plan says that the gap would be filled through £22bn in efficiency savings, requiring an extra £8bn in governmental spending a year by 2020 over and above increases in line with inflation. This will come on top of the extra £2bn announced in the autumn statement.

NHS England currently has an annual budget of £102bn. With Osborne’s pledge factored in, this is forecast to increase in cash terms to £122bn by 2020.

Osborne writes: “We back the NHS’s plan, but there’s no point having a plan without the funding to deliver it, so today we commit to deliver what the NHS needs ... I can confirm that in the Conservative manifesto next week we will commit to a minimum real terms increase in NHS funding of £8bn in the next five years.”

The chancellor adds: “Decisions about spending go to the heart of our politics because they reflect our values. We in the Conservative party are in no doubt about our approach: the NHS is something precious, we value it for the security it provides to everyone in our country, and we will always give it the resources it needs.”

Downing Street will hope that the funding pledge may provide a poll boost to the Tories, and go some way to meeting – or at least neutralising – Labour’s lead on the NHS. The public health service is regularly listed by voters as the most important issue in the election campaign.

The Stevens plan applies to the NHS in England, but Osborne’s proposed funding increases also mean that extra cash would be sent to the devolved administrations in Scotland, Wales and Northern Ireland who are free to spend the money as they see fit.

The Tories will also move to show they can deliver tangible changes in the health service by announcing that pensioners aged over 75 will be given the right to same-day access to a GP and everyone will have access to a GP and the weekends and in the evenings by 2020. “By supporting the most vulnerable we can improve their lives and ease the pressures on the NHS by reducing the number of unnecessary and often distressing visits to A&E,” the chancellor writes.

The announcement by Osborne is designed to take the wind out of the sails of Labour which has warned in a recent campaign poster featuring an x-ray of a broken leg that the Tories would cut the NHS “to the bone”. Tory sources said that the extra £8bn pledged by the chancellor also went further than the £2.5bn Time to Care fund launched by Ed Miliband in his speech to the Labour conference last year.

David Cameron, who had built up Tory trust on the NHS before he became prime minister in 2010, acknowledges in private that the Conservative party inflicted immense political damage on itself with the bungled delivery of the Andrew Lansley health reforms, which prompted Labour claims that the Tories want to privatise the NHS.

In his Guardian article, the chancellor pledges unequivocal support for the NHS, in a bid to address concerns that the Tories are less than enthusiastic about a universal health service that is free at the point of delivery.

He writes: “The National Health Service is there for you throughout your life: from the day you are born, to your final days. It is something to be valued, protected and improved, and that it is what David Cameron and the Conservatives have done in this parliament.

“Our absolute commitment to the NHS is supported by a strong economy so that it’s there, free at the point of use, for the future, able to cope with an ageing population, and able to offer the best healthcare in the world.”

Chris Leslie, Labour’s shadow chief secretary to the Treasury, said: “Nobody will believe a word of this. The Tories have tried to announce this five times before, but they still can’t say where the money would come from. And they haven’t been able to say how they will pay for any of their panicky promises over the last 24 hours.

“George Osborne’s extreme plan to double the pace of spending cuts next year means he cannot credibly claim to protect the NHS. Other countries which have tried to make cuts on this scale have ended up cutting their health services. That’s why he wasn’t able to announce any extra NHS funding in his Budget last month. And the Tories have £10bn of unfunded tax promises which they also can’t say how they will pay for and are ahead of the NHS in the queue.

“Only Labour has a fully-funded plan to raise an extra £2.5bn a year to recruit 20,000 more nurses, 8,000 more GPs and 3,000 more midwives – paid for by a mansion tax on properties over £2m, closing tax loopholes and a levy on the tobacco companies.

“As Ed Balls has said, Labour will do whatever it takes to save our NHS. But after their broken promises of the last five years, nobody will trust the Tories with our NHS ever again.”

The chancellor, whose announcement is expected to be welcomed by Stevens, makes clear that the extra funding can be delivered by the Tories for three reasons.

In the first place, he argues, the party is best placed to deliver strong economic growth. Second, he says, the Conservative party track record since 2010 shows it can deliver extra funding to the NHS after new Treasury figures showed that the coalition has delivered real terms increase in NHS spending of £7.3bn.

Third, overall public spending towards the end of next parliament – by which time the extra £8bn will kick in – will be more benign than over the past five years. Spending cuts between 2016-2017 and 2017-2018 will be followed by a year of spending increases in line with inflation in 2018-2019, followed by rises in line with the growth of GDP from 2019-2020.

Osborne also takes a swipe at the shadow health secretary Andy Burnham, who raised questions before the 2010 election about ringfencing NHS spending, to reinforce the Tory argument that funding can only be delivered if the economy continues to grow.

He writes: “Those who urged us to cut the NHS also fail to understand the most important thing of all – all of this is only possible because of a strong economy. Harm the economy with higher taxes and higher debts and not only do you put millions of jobs at risk, you undermine the NHS and all the vital public services that a strong economy pays for. Countries like Portugal and Greece lost control of their economies, and each cut their health budgets by more than 10%.”