Public spending Britain on course to become 'national health state', says thinktank

Britain was on track to becoming a "national health state" where half of all public spending was allocated to the NHS and social care by the end of the decade, a leading thinktank said yesterday.

- Richard Partington

Rachel Reeves used her spending review on Wednesday to prioritise billions of pounds for the NHS as she outlined the government's priorities up to the next general election while squeezing funding for other areas.

As the chancellor came under pressure yesterday to defend her plans, the Resolution Foundation said health spending was set to dominate public spending. Come the end of the decade the NHS would account for 49% of day-to-day public service spending controlled by Westminster - up from 34% when Labour last left government in 2010, it said.

The NHS, defence and long-term investment received the lion's share of the additional funding announced in the spending review, with 90% of the increase in the day-to-day budget going to the health service.

However, the Resolution Foundation and other experts said the chancellor might need to raise taxes in the autumn to maintain higher levels of spending amid a worsening outlook for the economy.

The Institute for Fiscal Studies (IFS) thinktank said yesterday that a dramatic turnaround in the economy was needed to avoid a fresh rise in taxes in the budget later in the year.