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Britain Faces $27 Billion Bill to Boost Health-Service Funding

Britain Faces $27 Billion Bill to Boost Health-Service Funding

(Bloomberg) -- Britain needs to find 20 billion pounds ($27 billion) in extra borrowing and taxes if it wants to return spending on the National Health Service to its historic growth rate.

That’s the view of the Resolution Foundation think tank, which said in a report Tuesday that per-person spending on health is currently on course to rise just 0.4 percent a year in real terms between 2010 and 2020 compared with 5.9 percent on average in the preceding decade.

Prime Minister Theresa May has hinted at a significant boost for the NHS after a spike in winter illnesses again saw services at many hospitals stretched to breaking point. Restoring historical growth rates, as suggested by Health Secretary Jeremy Hunt, would require increases of as much as 4 percent a year by the end of the current parliamentary term in 2022-23, the Resolution Foundation said.

But while the policy is popular with voters as the 70 year-old NHS battles severe funding pressures, the foundation cautioned against repeating the approach of the early 2000s by raising rates of National Insurance Contributions, a payroll tax.

“Instead it should consider a wider range of tax rises that are fair not only between rich and poor, but also between young and old,” said Deputy Director Matt Whittaker. Options include extending the tax base, canceling planned cuts in corporation tax and increasing taxes on wealth, he said.

To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Lucy Meakin

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