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Spending cuts or higher taxes are needed to fund NHS in the next 50 years

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e4788 (Published 13 July 2012) Cite this as: BMJ 2012;345:e4788
  1. Nigel Hawkes
  1. 1London

An ageing population will force Britain’s finances into a downward spiral of increasing debt, higher interest rates, and diminishing growth unless spending is cut further or taxes are raised, the Office for Budget Responsibility has concluded.

Rising health costs and low productivity growth in the NHS are two of the key factors underlying the calculations, which seek to estimate the extent to which government income and expenditure can be kept in balance over the next 50 years. Without substantial cuts in spending or increases in taxation, the gap will grow steadily wider. “This is clearly unsustainable” the office says in its Fiscal Sustainability Report for 2012.

To return public sector debt to the pre-financial crisis level of 40% of gross domestic product the government would need a permanent spending decrease or tax increases equal to 1.5% of gross domestic profit (GDP)—£22bn (€28bn; $34bn)—in 2016-7. …

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