Cookie Consent by Popupsmart Website

Connecting to LinkedIn...

Health & Social Care

News & Social Media

Government spending watchdog challenges NHS funding claims

Posted on 27/06/2018 by

Download (16)

‘Brexit dividend’ is several years away, cross-party committee report says

Theresa May’s claim that the extra £20bn-a-year for the NHS will be funded by a “Brexit dividend” is being challenged by parliament’s spending watchdog.

The public accounts committee is warning that any cash boost that might come in the wake of the UK’s exit from the European Union is several years away.

The MPs also conclude that the Brexit divorce bill for the UK will be at least £10bn higher than the £35bn-£39bn figure put forward by the prime minister.

Wednesday’s report from the cross-party committee will further undermine May’s claims that the government can expect to profit from an immediate cash boost after leaving the EU.

Last week, she said the money would be immediately available to fund a promised £20bn-a-year spending boost for the NHS before 2024. 

Meg Hillier, the chair of the committee, said any such increase was years away. “The true cost of Brexit is a matter of outstanding public interest. Government must provide Parliament and the public with clear and unambiguous information,” she said.

“Government’s narrow estimate of the so-called divorce bill does not meet this description. It omits at least £10bn of anticipated costs associated with EU withdrawal and remains subject to many uncertainties.

“Given these uncertainties, it is critical that Parliament and the taxpayer are kept informed as agreements are reached and new information becomes available.”

“There is much talk of an EU dividend but our work has highlighted a number of as yet uncertain costs. Any dividend will be hard to calculate and, if it materialises, is some years away,” the report concludes.

The UK will pay an extra £3bn more in budget contributions as well as an additional £2.9bn to the European Development Fund, MPs warned.

The committee said the way the settlement was calculated meant some of the UK’s liabilities would not be known until 2022, when the final tally will be made of Britain’s budget contributions for 2014 to 2020, based on national income over that period. 

While the Treasury estimated that 60% of the settlement would be paid off by the end of 2021, the committee said payments to meet Britain’s estimated £8.6bn liability for its share of EU staff pensions and post-employment sickness benefits could run to “at least 2064”.

“The Treasury has undertaken limited analysis of the impact of changes to the assumptions on which the settlement estimate is based, considering the inherent uncertainty involved in forecasting future events,” the report said.

The committee said that if MPs were to have a “meaningful vote” on the withdrawal agreement later in 2018, they would need an up-to-date estimate of the divorce bill as well as better information about the wider costs of leaving the EU. 

May announced an extra £400m extra in weekly NHS spending within five years last week, as the government plans to celebrate the 70th anniversary of the NHS.

She told the BBC’s Andrew Marr Show that the money would be saved from former EU payments.

The Institute for Fiscal Studies said, however, that even the government had accepted that an immediate post-Brexit boost to coffers would not happen.

Source: TheGuardian