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Tuesday, 18 January, 2000, 16:02 GMT
Health gap 'even bigger than thought'

Tony Blair has pledged to radically increase NHS spending

Tony Blair's promise to increase healthcare spending to match other European countries will be much tougher to fulfil than first thought - according to an influential think-tank.

The Prime Minister, under pressure over NHS performance, pledged on Sunday to boost overall healthcare spending to the EU average by 2005.

Existing figures suggested the average is 8% of gross domestic product (GDP) - a crude measure of the wealth of a country.

Tony Blair: under attack over health
The UK's spend was calculated as 6.8% - well below the average and beaten by every country apart from the Republic of Ireland.

And that would mean the government eventually finding an extra 11bn in real terms year on year.

However, the Kings Fund, which provides independent analysis on healthcare issues, has recalculated the average - and found it to be 8.6% instead of 8%.

Even that 0.6% extra would add a massive 5bn to the bill - making it even harder to find the money without either raising taxes or imposing cuts on other government departments.

'Problems ahead'

Kings Fund health systems director John Appleby said: "Finding the money to close the spending gap will be problematic in the long term.

"Although the Treasury has predicted surpluses of around 11bn, such surpluses are cyclical and will not be guaranteed in the long run."

He described other ways of increasing the total spend - such as levying more patient charges, or encouraging the expansion of the private section with tax breaks - as "inequitable and expensive."

The calculations means that, to reach the average within the five year mark, 2.65bn extra in real terms would have to be added to the UK health budget each year.

Even the substantial investment programme in the NHS since 1997 falls more than 1bn a year short.

If inflation in the NHS runs at 2% a year, the total budget in 2005/6 would have to be at least 77.5bn - compared with 48.5bn currently.

Conservative leader William Hague has suggested on Tuesday that total spend should be increased by developing the private sector.

Countries such as France and Germany - which have more private provision - spend a far higher percentage of GDP than the UK.

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See also:
14 Jan 00 |  Health
NHS funding row grows
18 Jan 00 |  Health
The health gap - Britain and Europe
17 Jan 00 |  Health
Q & A: Extra money for the NHS

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