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The 2021 Autumn Budget: Health and social funding predictions

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Management accountant and AccountingWEB Live Expo panellist Makbul Patel gives his insight into England's health and social issues ahead of the upcoming Budget.

20th Oct 2021
Principle Accountant Bolton at Home
Columnist
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You don’t need me to tell you how infuriating the past couple of years have been. March 2020 was perched as the gateway to a very comprehensive turbulent era of the modern world. Tiny organisms left a trail of death and destruction. Heartbreak was indiscriminate as people coped with the crushing loss of family members. Livelihoods were turned upside down and whatever rosy plans we had for the future had to be cancelled, or at least shelved until a glimmer of hope appeared.

We are not completely out of the woods, but as we find ourselves approaching the other side of the curve we are faced with troubles of another sort: supply chain chaos, winter fuel crisis and gravity defying inflation.

Over the last 19 months, governments all over the world have had to step in to stymie the catastrophic impacts to health, the economy and education. The British government introduced furlough payments, grants and bounce-back loans. Tax breaks were given to businesses, and the health service had to be shored up with extra funding to meet the overwhelming pressure.

On the back of all this, the Chancellor will be announcing the Budget in a few days. The national coffers have taken a hammering, which only means one thing: tax rises. No such thing as a free lunch - it's the Budget of reckoning.

It is very likely personal allowances will be frozen, corporation tax increased and the Chancellor will introduce a health and social care levy. It’s going to be a Budget of take, take, take.

The health and social care levy is a new tax on income. It will also apply to people over the pensionable age and the self-employed. It’s part of the ‘build back better’ campaign and aims to raise over £30bn over three years for England.

As it’s a new tax it won’t come into effect until April 2023, so those who are considering retirement still have a bit of time. 

However, to mitigate the time delay NIC will be temporarily increased by the same amount from April 2022.

Health and social care levy
Makbul Patel

(£30.3bn to be raised over three years. Source: HM Treasury calculations in "Build Back Better: Our Plan for Health and Social Care".)

Closely linked to the Build Back Better initiative, the government has been focused on their levelling-up agenda in a bid to narrow the gap between the most affluent and productive regions (ie London and the South) and the rest of the country.

However, in order to provide a solution to a problem, one must first be able to define the problem. It appears that levelling-up means different things to different people. Even the government struggles to pin this one down. My focus as always will be on human value. 

I’ve pulled some stats on life expectancy from the ONS website - please bear in mind that these charts are pre-pandemic.

Average life expectancy 2001-03
Makbul Patel

(Source. https://www.ons.gov.uk/peoplepopulationandcommunity)

No surprise to see that almost 20 years ago the south-based regions had the highest life expectancy in England, while London sat in mid-table respectability with the North holding the table up at the bottom.

Successive governments have pushed towards narrowing this gap. As a good amateur-economist I have fast forwarded to the present day to see how things have changed.

Average life expectancy 2017-19
Makbul Patel

(Source. https://www.ons.gov.uk/peoplepopulationandcommunity

As an ‘ey-up’ northerner, this chart brought a lump to my throat. Not only has the North remained at the bottom, but London has shot to the top. Average life expectancy in general has increased by a couple of years or so. Nonetheless the North is still the sick man of England, lagging almost 20 years behind the South.

The Chancellor has many anxious people waiting to hear what he says. The levelling-up box of party tricks needs to have real positive investment.

The narrowing of any gap of unfairness, life expectancy or economic opportunity must start with understanding the fundamental causes of these differences - lifestyle changes that are encouraged by long term and cultural investment in health, housing and places to visit and enjoy. Happiness and contentment cannot be brought about by governments who are naturally inclined to look away from the North. The neglect then fosters hopelessness which in turn has a negative effect on health and life expectancy.

The other aspect not to be ignored is that there is a risk of sweeping generalisation. Even in regions considered prosperous there are areas and demographics that also suffer. In London, for example, there are many poor and forgotten people that don’t see a way out.

The budget needs to have credibility with its long-term vision. People must be given a reason for them to believe in their sense of place in this world, to have pride in their communities and create a healthy environment where children can achieve. Forgive me if I don’t hold much hope.

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Makbul Patel will be speaking at the first day of our AccountingWEB Live Expo this December. Don't miss out - register now for free access to all our panels and seminars.

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