Health budget needs to grow by £400M per year just to stand still, MLAs told

Stormont's health budget needs to grow by more than £400 million each year just to maintain the current level of service, MLAs have been told.

Brigitte Worth, finance director at the Department of Health, told her scrutiny committee that the projected funding gap in health for the coming financial year is potentially as high as £1 billion.

Since the Assembly was restored earlier this month, the Health Committee has been receiving a series of briefings from health chiefs and civil servants on budget pressures facing the sector.

Ms Worth told MLAs "the financial position for health has never been so tough".

She said: "The gap between what we need to run the service we are currently running and what would be needed to run it well has been steadily growing over a number of years now.

"As was the case in 2022/23, we have only balanced the books in 23/24 because of additional funding from HM Treasury.

"This additional funding has been provided in the form of a loan that we will have to repay if we don't meet several conditions, one of which is the raising of additional revenue in 2024/25.

"While we hope it's a loan we will not have to repay, it will have a significant impact in the future if we do.

"The £550 million we needed this year to bridge the gap in health finances has been provided on a one-off basis, meaning we are not guaranteed to receive it again.

"That is a significant part of the reason why our estimated funding gap for next year is potentially as high as £1 billion."

She added: "The other reason for the large increase in our funding requirement is that the underlying level of inflation in health, taking into account growth in demand for our services as well as pay and price inflation, runs at an estimated 6%.

"That is when underlying inflation is closer to 2% than the levels we have been experiencing.

"Every year we expect to need over £400 million more just to stand still.

"We face the reality that going into 24/25 we are unlikely to receive all that we need to maintain services at existing levels, recognising that these existing levels are frequently inadequate and most of those providing services will tell you that services are unsustainable if funding is not increased."

Ms Worth said there were difficult political choices to be made.

She added that, while efficiencies would continue to be sought in health services, these would not close the funding gap.

She said: "It is difficult to see how the gap could possibly be bridged through efficiencies alone, even if the system were not having to spend significant effort firefighting the daily crises caused by an excess of demand over capacity.

"The challenge we face is to achieve sustainability in our services.

"That challenge is becoming more difficult year on year.

"Decisions will be required at political level, including at national level.

"They include options on public expenditure levels, taxation, revenue raising, increasing the level of charging and providing a smaller number of services in order to do so well.

"Avoiding decisions is a decision too and I personally would rather see options being chosen in a planned way than the current trajectory where we are moving closer to a situation where those that can pay get treated and those that don't have to wait longer and longer.

"That's not the society I want to live in."