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Securing Funds for the Proposed NHS Multi-year Funding: The Feasibility of Using a Hypothecated Tax

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  • Timmins, N.

Abstract

In June 2018 the UK Government announced an increase of 3.4% per annum in spending on the NHS in England for each of three years. It indicated that taxes will rise to pay for this. Debate has increased as to whether a separate (hypothecated) tax should be introduced to fund the NHS. The Kings Fund has published this [year]( https://www.kingsfund.org.uk/publications/hypothecated-funding-health-and-social-care) on the topic. OHE published an academic review sometime [ago]( https://www.ohe.org/publications/hypothecated-health-taxes-evaluation-recent-proposals). This OHE publication by Nick Timmins, a senior fellow at the [Institute for Government]( https://www.instituteforgovernment.org.uk/person/nicholas-timmins) and the [Kings Fund]( https://www.kingsfund.org.uk/about-us/whos-who/nicholas-timmins), sets out arguments in favour and against. It is based on the seminar he gave at OHE in July 2018. The issues he explores include - - The argument that hypothecation will bring greater stability, transparency and public support; - Which tax(es) might be suitable? - Possible distortions in public expenditure that might result; - Dealing with shortfalls and surpluses; - UK experiences of revenue hypothecation in the past, distinguishing soft (non-binding) approaches such as Vehicle Excise Duty, and hard (binding) pots such as National Insurance, neither of which have held. He concludes by quoting a John Appleby [blog]( https://blogs.bmj.com/bmj/2018/03/29/john-appleby-a-dedicated-tax-to-fund-the-nhs-a-zombie-policy-idea/)which argues that the key decision is to agree (or not) to spend more money on the NHS. Creating a new tax is a distraction from this.

Suggested Citation

  • Timmins, N., 2018. "Securing Funds for the Proposed NHS Multi-year Funding: The Feasibility of Using a Hypothecated Tax," Seminar Briefings 002074, Office of Health Economics.
  • Handle: RePEc:ohe:sembri:002074
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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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