27 / 06 / 2017
Getting a Brexit deal that works for the NHS
Nuffield Trust, May 2017
In this briefing, published before the election, Mark Dayan policy and public affairs analyst at Nuffield Trust, explores the consequences of various Brexit decisions for the NHS. He looks at the potential risks and benefits of withdrawing from the EU, with reference to the financial settlement for the NHS, workforce pressures, the impact of expat pensioners losing EU health coverage and the impact of changes to regulation.
The paper begins by looking at finances, in the context of an NHS needing significant extra funding in the years after Brexit. Dayan describes the ways in which Brexit may change the amount of money available to the NHS:
- The deal could make more money available directly for the NHS, as promised by the Leave campaign. Ending the UK’s contribution to the EU could “account for a 4.1 per cent increase on top of the Department of Health (DH) budget for 2020/21”. This would be around £5.2 billion additional funding, accounting for matched funds across the UK.
- However, there is likely to be a short-term economic slowdown associated with Brexit, resulting in “lower tax revenue and higher welfare spending”, with an estimated £15.2 billion hit to public finances by 2020/21. If shared equally across the public sector this would result in a £2.4 billion reduction in NHS spending.
Another key issue addressed is workforce. The briefing notes serious staff shortages in both NHS and social care, with providers increasingly reliant on migrants from the EEA to meet this shortfall. They note that “almost a third of newly registered nurses in the UK had trained in the EEA” last year.
Projections are quoted that show that if EEA migration is stopped there would be shortage of an additional 20,000 nurses by 2025/6. For social care staff, this gap could reach 70,000. Similarly, the right for current EEA staff to stay is not confirmed, leading fewer people to migrate to the UK and many people to leave.
Suggested solutions to address this workforce crisis include: exempting nurses from migration restrictions; establishing a shortage occupation system; and “dramatically increasing” the number of domestically trained staff. For social care staff, increasing the domestic workforce may also require offering more competitive wages, in an already very financially strained sector.
The third point of concern in the briefing involves the deal for expat pensioners, who currently have their health care paid for through the EU S1 programme. DH currently pays £500 million into this scheme per year, but if it is ended and pensioners return to the UK, the cost to the NHS for their care could be around £1 billion every year. There would also be additional strain on already stretched staff and beds to care for these people.
Moving finally to regulation, the paper looks at the possibility that the UK may no longer be a member of the European Medicines Agency (EMA). As a separate, much smaller market, the UK may get access to new treatments later, or even not at all if companies view the cost of regulating the medicines for this market as prohibitive. Membership of the EMA has also been helpful in ensuring supply of medicines, trading with countries where medicines are cheaper and ensuring there is competitive pressure on the pharmaceutical industry. Direct benefits of the UK’s membership are currently estimated at £100 million. In clinical trials, the paper identifies risks that new regulations for the UK would “discourage trials including NHS patients”.
The briefing also identifies a few opportunities in changing regulations post-Brexit. The NHS would have more freedom when it comes to procurement and competition laws, allowing changes to British laws in this area. However, a new trade deal with the EU could easily include these rules. The author also identifies an opportunity to be more flexible on working times, which are currently restricted through the Working Time Directive.
Find out more about Brexit and the possible implications for the NHS on our dedicated web section.