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Evening Standard
Evening Standard
National
Alastair Lockhart

The UK is turning into a 'National Health State', experts say after Rachel Reeves' spending review

The UK risks becoming a ‘National Health State’ with half the country’s public service spending going to health by 2030, experts have warned.

It comes after Chancellor Rachel Reeves handed the NHS billions more in funding in yesterday’s spending review.

The health service received an extra £29 billion per year for day-to-day spending and more cash for capital investment.

The Resolution Foundation has warned that the announcement follows a trend of NHS funding coming at the expense of other public services.

Ruth Curtice, the foundation’s chief executive, said: "Health accounted for 90% of the extra public service spending, continuing a trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade."

Following the spending review, figures from the Office for National Statistics showed that the UK economy shrank by 0.3% in April - worse than expected.

This morning, the Chancellor refused to rule out tax rises in the autumn, which some argue are now inevitable.

Asked about possible taxes on Sky News, Ms Reeves said she was “not going to write budgets for the future”.

Defence was another of Wednesday's winners, Ms Curtice said, receiving a significant increase in capital spending while other departments saw an overall £3.6 billion real-terms cut in investment.

The Institute for Fiscal Studies (IFS) made similar arguments about "substantial" investment in the NHS and defence coming at the expense of other departments, although the think tank's director Paul Johnson warned the money may not be enough.

He said: "Aiming to get back to meeting the NHS 18-week target for hospital waiting times within this Parliament is enormously ambitious - an NHS funding settlement below the long-run average might not measure up.

"And on defence, it's entirely possible that an increase in the Nato spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard."

Ms Curtice added: "The extra money in this spending review has already been accounted for in the last forecast.

"But a weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn."

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