Blog 18th June 2018

Blog 18th June 2018

In this week’s blog, I refer to: The National Health Service; Theresa May; Brexit; Institute for Fiscal Studies; the Economist; European Union; Public Health; Social Care; Local Government Finance; the Heritage Lottery Fund; Supported Housing; Local Housing Companies; Local Authority Housing Finance; Seminars and Training.

The National Health Service has been much in the news recently, with Theresa May announcing today that the government will spend £20billion of the ‘savings’ that will result from ‘Brexit’ on the National Health Service. This announcement has met with scepticism in many quarters, not least because the government’s own figures confirm that ‘Brexit’ will result in a reduction in government revenues rather than an increase. Commentators including the Institute for Fiscal Studies and the Economist have said that, for the National Health Service to receive such an increase in funding either taxation or government borrowing would have to increase.

It is also interesting to set the £20billion in context. In 2009, expenditure on the National Health Service was equivalent to 8% of Gross Domestic Product, but this is forecast to reduce to 6% by 2020. This is a lower level of expenditure on health than is found in most other developed countries. To match the average level of expenditure across the European Union, expenditure on the National Health Service would have to increase from £120billion to £185billion and taxation would have to increase from 33% of Gross Domestic Product to 36%.

Differences in expenditure clearly translate into differences in service provision. Germany, France and the Netherlands spend 11.3%, 11.5% and 10.9% respectively of their Gross Domestic Product on health services. The number of doctors per 1,000 people are 3.9, 3.1 and 3.2 respectively. The number of hospital beds per 1,000 people are 8.3, 6.4 and 4.7 respectively. In contrast, Britain spends 9% of its Gross Domestic Product on health (including National Health Service and private provision) and has 2.8 doctors per 1,000 people and 2.9 hospital beds.

Furthermore, with an ageing population and advances in medical science, the demand for health services has, is, and is expected to, increase by 4% a year more than the increase in population. However, the government’s ‘Five Year Forward View’ of the National Health Service, published in 2016, identified that there was already a £30billion ‘hole’ in National Health Service finances and stated that:

“It is implausible to think that over this period National Health Service spending growth could return to the 6-7% real annual increases seen in the first decade of this century.”

I think we need to move forward from the rather shallow political debate about the National Health Service that we have seen in recent years. In particular:

• We need to increase expenditure on health significantly. In the long-term this cannot come from borrowing, the ‘magic money tree’, fictitious ‘Brexit’ dividends or innovative taxes that no one will notice. It must either come from increased taxation or the introduction of medical insurance.
• We need to think holistically. We need effective integration between Health, Public Health, Social Care, Housing and other services centred on supporting individuals with needs.
• We need to consider how to be more proactive in assisting people with managing their health both for their own benefit and to help to manage demand on health services.

I have written a briefing paper on National Health Service finances that can be freely downloaded from here.

Last week, we published the June 2018 edition of the Public Services News. It includes articles on:

• Local Government Finance
• Local Authority Budgets in Cumbria
• Public Services and ‘Brexit’
• Heritage Lottery Fund – Strategic Funding Framework 2019-24
• Heritage Action Zones
• National Planning Policy Framework
• Budget 2017 – The Implications for Public Services
• Scottish Budget 2018/19 – The Implications for Public Services
• Social Care and Supporting People in Wales
• General Data Protection Regulations

Your copy can be freely downloaded from here.

We have also published two new books.

The first is on ‘Funding Supported Housing’. It is designed to explain the funding of supported housing in England and the proposals that the government is making to change the basis for that funding. The Government is planning to change the way in which Supported Housing is funded with separate arrangements for sheltered housing, short-term supported housing and long-term supported housing. This book explains and examines the government’s proposals and their implications for local authorities, housing associations and their tenants. It addresses the following questions:

• What is the Government trying to achieve?
• What will be the implications of the new sheltered housing rent for sheltered and extra care housing?
• How will the locally administered budgets for short-term supported housing work?
• What are the Financial Opportunities and Threats for Supported Housing in Local Authorities and Housing Associations, including the implications for the development of new Supported Housing schemes?

For further information or to order a copy, please click here.

The second is on ‘Local Housing Companies and Development’. Local housing companies are independent arms-length commercial organisations wholly or partly owned by councils. They can develop, buy and manage properties within and outside of a local authority area. The homes they provide sit outside of the local government housing financing system and are not subject to the Housing Act and most of the social / affordable housing regulations.

This book explains and examines why and how local authorities are setting up local housing companies and other delivery vehicles. It is suitable for people in authorities that already have Local Housing Companies and people in authorities that are considering setting up an arms’ length delivery vehicle. It is suitable for councillors, board members, housing managers, tenant representatives, finance staff and others with an interest in the development of new homes through local housing companies and other delivery vehicles. It considers the following questions:

• What is the Policy Context? Why are Councils establishing Local Housing Companies and other Delivery Vehicles?
• What are the issues that local authorities should consider before establishing a Local Housing Company?
• What are the financial models for development through Local Housing Companies?
• What are the steps that local authorities should take when establishing a Local Housing Company? What have authorities already achieved through Local Housing Companies?

For further information or to order a copy, please click here.

Our next seminar will be on ‘Developments in Local Authority Housing Finance’ and will be held in Leeds on 10th July. It is proving popular, but we still have a few places available.

This seminar looks in depth at current developments in local authority housing finance in England – especially the implications of the policies of the government, the public finances, rent policy, welfare reform including universal credit, issues around the reinvigorated ‘right to buy’, changes to the funding of supported housing including the proposed sheltered housing rent and locally administered budgets for short-term accommodation, the implementation of the homelessness reduction act, the flexible homelessness reduction grant, the affordable housing programme, local housing companies (what they can offer, how to establish them and how to set one up) and new development.

For more information or to make a booking, please click here.