Professor Kieran Walshe of the Alliance Manchester Business School responds to the absence of NHS and Social Care from last week’s Autumn Statement. Weighing the dangers of continuing budget cuts and spiralling demand against the opportunities offered by the devolution of health and social care being piloted in Greater Manchester, Prof. Walshe argues that the economic case for strengthening the public provision of healthcare remains compelling.

Sustainability of Health and Social Care spending in question after decade of flat spending and re-organisations

Devolution may answer the ‘governance vacuum’ left by Lansley reforms

Seen in its wider economic context, Health and Social Care spending are not net costs but in fact a key to productivity and GDP growth

In last week’s autumn statement from the Chancellor, there was nothing at all about NHS or social care spending, despite a crescendo of concerns about both sectors being unable to cope with the nexus of falling spending and rising demand. Providers of health and social care services, both public and private, are going bust, despite valiant efforts at cost control. So can we afford the NHS, now and in the future?

This week in the House of Lords, a select committee on the sustainability of the NHS heard evidence from the leaders of health and social care devolution in Greater Manchester and asked whether devolution was the solution to the NHS and social care crisis. The short answer is, of course, no. The current financial crisis results from a combination of the toxic legacy of the coalition government’s ill-starred Lansley reforms in 2012 and an unprecedented decade of flat funding for healthcare and cuts for social care, and devolution is no quick fix. But the longer answer is that there is lots to learn from devolution about how and why we can “afford” the NHS.

Health and social care devolution in Greater Manchester is a hugely interesting and exciting experiment in creating real, democratically accountable, place-based governance of health and social care, integrating healthcare into wider public services provision, and seeing how far it can get. It is starting to make up for the governance vacuum left by those ill-advised Lansley reforms, which abolished most local and regional level structures and created several national quangos like NHS England to run the NHS. It brings 37 healthcare organisations and local authorities in Greater Manchester together around the table pretty much for the first time. And it opens up all sorts of new possibilities for how we think about the costs of healthcare and what is affordable.

For example, mental health services cost money to provide, but poor mental health generates costs in the criminal justice system, in public housing, and in social security. Community-based health and social care cost money to provide, but without them, people end up in the hospital system where they cost a lot more, and their carers are prevented from working and end up both relying on welfare payments and not being able to contribute by working and paying income taxes. Early years health and social care cost money to provide, but are crucial to children’s school readiness and subsequent educational progress, which in turn impact on future job prospects and worklessness, and social security spending and tax income. Health promotion and disease prevention cost money to provide, but the social and economic costs of avoidable chronic disease are huge.

The point is that when you think about health and social care in isolation, they look like costs. When you see them in the wider context of public services and the welfare and prosperity of a community or of society as a whole, they look more like an investment, and quite a good one at that. Health and social care devolution creates an opportunity to make that case for investment robustly.

So the answer to “can we afford the NHS?” is, at least in part, can we afford not to? Never mind the moral purpose argument – that it is simply wrong to leave people lacking proper health and social care. Does it make any sense to accept the social, human and economic costs of poor health, and all the adverse consequences that go with them? There may be a good reason why wealthy nations spend more as a share of their GDP on health and social care than others – that they have realised good health and social care services are part of the reason for their prosperity.