Where has the money for the NHS and schools gone?

[EmmaGrundyForPM]

I'm not an economist so please cam someone explain this in lay terms to me?

The NHS and schools need far more funding. Along with other public services. But why is this? Taxes have risen, some costs have gone down, and yet there's not as much funding as,say, 20 years ago.

I work in local government. We've had wage stagnation for at least 10 years. In real terms, my pay is about 20% less. That's the same in a lot of other public services. I appreciate that other costs, especially building ones, have gone up.

Given that, as far as I can see, taxes haven't gone down, why is there now far less money to pay for public services?

Our pension funds invest in global shares. It’s just how the global economy works. We needed significant investment when the water companies were sold, but the aging system and significant population growth has caused issues. So has the changing climate. Again we almost certainly need to pay more. The CEO salary dwarfs when you look at the investment needed. No political party can tackle all of this.

Imo water shouldn’t be a private business. It’s too precious. Some things shouldn’t be commodified.

£200 million is not a drop in the ocean by anyone's measure. Try telling that to some poor soul languishing in agony on an NHS waiting list.

Water is a commodity when we pay for it! And for sewage! Of course it’s got money attached to it. How do you think we should build sewers? Lottery funding? The water companies were supposed to raise money to build the infrastructure. This is now impossible so we will have to think of another solution but it will cost £million.

£200m goes some small way to paying nhs negligence payments.

By the way, even if her payments were inflated, it may well have been a similar sum would have been paid to someone else. Or not much less. Failure to plan was the biggest issue.

But private ownership changes the priority to profit/ shareholders.

Lack of honesty integrity and transparency.

Maybe another company would’ve delivered for that money.

@Xyz1234567 @Zonder

The NHS budget is £167 billion a year. Yes that money would make a difference to some people, of course. But it wouldn't change the fact that as a country we either need to accept lesser public services or pay more tax - there simply isn't enough waste and corruption to cut to change that hard fact.

And that has been to the detriment of our country.

Of course a lot of people, services and teams may be involved but a lot of this was purely firefighting while waiting to get a diagnosis.

Prompter diagnosis and support could have prevented some of those costs and potentially reduced some of the stress DH and I faced - easy example, DS being prescribed melatonin has been life changing for all of us - couldn't be prescribed until he'd seen the paediatrician for assessment. Things are still difficult, but no longer being up with DS until 1am has saved my sanity. Unfortunately he often does still wake around 3 or 4ish but that's a lot more manageable if he's asleep before 11, usually before 10.30.

Not necessarily. We don’t seem to mind Specsavers. We quite like non nhs glasses. And other suppliers. What we don’t seem to like is no choice. We are Thames Water and that’s it. We have trains operated by one company. No choice. Prior to privatizing services many people didn’t like the state offering. We, as usual, are just short of money and the state starved utilities of investment.

Not if you spend it on just a few things perhaps but it’s minuscule in terms of government budgets.

We too waited for an appointment for months only for the letter to arrive after the appointment time and daye

What was so ridiculous was that on the letter it said

4th February appointment requested

5th May appointment made

14th June appointment request sent for typing

21st June appointment letter typed

28th June appointment (for 31st May) letter sent out

This particular department advertised their missed appointment numbers in tens of thousands and the drs and nurses when you mentioned the system didn’t seem to realise the problem

With the nhs it only takes £1 or £2 here and there to be spent on things that happen multiple times per day that are not vital and the money can soon be lost

I totally agree. I would like a lot of services to be (re)nationalised.

A few major things:

• aging population means NHS demand keeps rising and rising. NHS funding grew in real terms even though austerity, but demand rises faster.
• growth has stagnated since about 2007 and didn't accelerate to make up the gap. That was seen in many countries (except the US), but austerity probably made it worse for us.
• austerity also directly suppressed NHS and schools funding
• there were large Covid costs on the NHS but I don't know if they are material on a 'grand scale' or not. Covid put a strain on public finances in other ways eg furlough etc
• interest rates and inflation post-Covid have eroded budgets directly
• anti-growth policies including lack of housing/planning, and Brexit, caused by many things but one is the fact that retired people and property owners vote at a disproportionate rate.

What it isn't is MP salaries.

Also covid impact on YP mental health, so more YP are signed on and unable to work. Not pointing at YP but I read this somewhere in some government policy. So economic growth isn't fast enough.

I agree with a lot of your post, but it's simply not true that we don't tax the rich (or, at least, not if you mean the high-earning).

The top 10% of earners pay over 60% of total income tax, and a disproportionate share of most other taxes too.

You can argue over what the right share should be, but any discussion of funding for public services needs to recognise that most people cost the public finances more than they pay in. Also that different generations have got a very different deal from the public purse through their lifetimes.

But in the optimistic case, it also gives the owners a big incentive to run efficiently and to innovate.

Do you think the supermarkets would be better run if they were one state-run provider? Because food is also precious.

I think there's a reasonable argument for nationalising water but it's not about the profit incentive or water being precious per se. It's that water is a natural monopoly in many ways (it's the same pipes, you can't get much real competition), it doesn't need much innovation or risk-taking (we don't need private investors to offload risk onto), it needs to be quite highly regulated anyway, and it needs a lot of capital investment.

The need for big capital investment is of course a reason it was privatized, to keep that off the public books. But actually the cost at which the government can borrow is below what a private company can.

I'm prepared to believe public management might have been a bit stodgier than private, but that doesn't seem to outweigh the advantages.

@GeneralPeter A lot of views are based on a very loose notion of what “rich” actually is. I think we do face issues if we overtax because, historically, this has stunted growth. We have 0 growth right now and the UK isn’t a great place to do business due to Brexit and other factors. Not wanting people to earn more is never going to encourage entrepreneurs. They just see working hard and being successful as not worth the effort. There’s a tipping point where we simply don’t get more tax into the coffers.

Growth is the key. The current government doesn’t feel very business friendly in many ways. I agree with you over water because there’s only one provider in the pipes. However there’s the sewerage issue. It may well be we need innovation in this industry. Highly unlikely government can fund all that’s needed. As we now know, for Thames Water, the shareholders won’t so probably it’s a dead duck as far as the market is concerned.

That's appalling!! I'm so sorry that happened.

I agree growth is key. That was the one thing Truss got right! We have to encourage investment, lower the cost of living (housing being the main one), and simplify the tax system. I'd also incentivise the right kind of immigration to grow the economy and the tax base, and the worker-to-retiree ratios.

I don't mind the tax system being fairly steeply progressive, but I think high earners also need to feel that the system is fair. I think the best way to do that is to have a growing economy and good services: so the people who do well financially feel they're doing well because the country is doing well, and they can see what they are paying for. Not that the country is doing badly so they have to pick up the tab.

I feel there hasn't been any serious economic thinking in the Tory party for many years. I'm hoping Labour is better. Starmer has made some good noises about being pro-growth, but the proof will be in the pudding.

I think in the case of food/ supermarkets there is enough real choice in terms of which supermarket and choices within the supermarket from basics to finest/ extra special.

Water being owned by remote shareholders hasn’t resulted in innovation. Maybe there should be govt incentives built in.

Pouring untreated sewage into our waterways is scandalous.

Agree 100%. The Tories being corrupt liars doesn’t excuse the public in all of this

@Pinkfluffypencilcase

Yes, I agree. I don't disagree with private shareholders in principle, but if there can't be true competition and there isn't a need for risk taking or innovation, I'm not sure there's much benefit.

Ultimately, I'm a pragmatist though. If privatised water had turned out great, I wouldn't be quibbling about the ownership model.

I also think the government could be much more skilful in managing technical things. We don't seem to be prepared to grow and promote real expertise in the civil service, or pay the going rate for it, which ends up being a false economy.