Keir Starmer, the new British Prime Minister, and his wife Victoria greet supporters as they arrive at 10am … [+]
The British Labour Party won a historic victory on 4 July, ending 14 years of Conservative rule. One of the new Labour government’s key goals is to revive the National Health Service (NHS) by reducing waiting times for diagnosis and treatment and improving health outcomes for the population. But restoring the NHS to a more functionally optimal state faces significant challenges, including funding at a time when the economy is weak and the government has pledged not to raise taxes.
The NHS is a tax-funded healthcare system in the four countries of the United Kingdom, providing free healthcare to all residents. The NHS was the first healthcare system of its kind, founded in 1948 on the principle of free and universal access. Ability to pay no longer prevented British residents from obtaining medically necessary healthcare. Inequalities in healthcare provision, which had long plagued the British healthcare system, were significantly reduced.
The NHS remains very popular with the British public, according to a comprehensive 2023 survey in which 72% of respondents said the healthcare system was “crucial to British society” and that “everything should be done to maintain it”. However, 77% believe the NHS is not ready to meet the increasing healthcare demands of an ageing population. And 51% believe the NHS is not ready to keep up with new medical technologies to improve patient care.
The NHS has been plagued by problems for decades, many of which can be attributed to the fact that it is a relatively cash-strapped system. The UK spends less per capita on health care than most of its peers. At $5,493 in 2022, annual per capita health care spending in Britain is less than half that of the US, at $12,555, according to the Peterson-KFF analysis.
Severe budgetary constraints have led to a record number of patients (7.7 million people) on waiting lists for diagnosis and treatment. In addition, relatively low remuneration of (junior) doctors and staff has left the system in a situation of chronic unresolved pay disputes and labour shortages.
More and more people are opting for care in private clinics and hospitals to avoid long waits. Figures on private healthcare use in 2023 show a record number of procedures worth £4 billion ($5.1 billion), often in the form of diagnostic tests and elective surgery.
However, private health insurance only covers about 10% of the population. The private sector therefore still does not play a substantial role. The vast majority of citizens and residents rely on the NHS for their care.
Ahead of the election, Labour unveiled a new “Future Fund” that promised to equip the NHS with state-of-the-art equipment to cut waiting times. Labour pledged to deliver 40,000 extra operations, scans and appointments per week in England by introducing more weekend services, as well as tapping into the private sector where necessary. As part of its mission to “get the NHS back on its feet,” Labour proposed a £1.1 billion ($1.4 billion) plan to recruit and train more nurses.
Prime Minister Keir Starmer faces a tough task: reducing waiting times and improving the quality and outcomes of health services, as the UK economy is failing to grow, meaning the country will struggle to raise the money it needs to rebuild the NHS.
During the election campaign, Labour said the money would come from tackling a loophole in the tax system, known as non-domiciled tax arrangements for people who live in the UK but are not permanently settled. Currently, such people only pay tax in the UK on money earned in the country and can avoid paying it on their foreign income, allowing wealthy people living in Britain to make the low-tax country their official domicile. Research from the London School of Economics suggests that eliminating this special exception could raise £3.2 billion ($4.1 billion) a year for the government.
In addition to increased spending, the new government intends to make structural changes to the existing health model. The then health secretary, Wes Streeting, warned in April that the NHS would not receive any additional funding without what he called “major intervention” or reform.
Specifically, Streeting highlighted the importance of the NHS moving from an acute care model focused on late diagnosis and treatment, to one in which there is a greater emphasis on disease prevention and chronic care management delivered at a local level.
The Labour Party manifesto states that the NHS “must evolve into a community-based health service, with more care delivered in local communities to detect problems earlier. To achieve this, we must over time shift resources to primary care and community services”. The aim here is to ensure that the NHS is not just “a health service, but one that can prevent ill health in the first place”.
The newly elected government’s ambitious plan to turn around the NHS will inevitably face challenges. Yet there is consensus across the British political spectrum that reform is needed. In a post-election speech, former Conservative health minister Jeremy Hunt encouraged the Labour government to “use its majority to deliver much-needed reforms to the NHS in a way that is sometimes difficult for Conservative governments to achieve.”
