Alex Neil puts forward '˜health tax' proposal to improve NHS

Scotland should introduce a new health tax to fund fresh spending in the NHS as it struggles to make the 'significant improvements' needed in performance, former health secretary Alex Neil has said.

Former health secretary Alex Neil has said. Picture: John Devlin
Former health secretary Alex Neil has said. Picture: John Devlin

The senior SNP figure also laid bare the massive waste in bureaucracy and drug spending in Scotland’s health service in a hard-hitting report published yesterday setting out the need for change.

It included demands for a crackdown on well-off consultants and GPs who retire in their mid-50s - then return as highly paid locums. This practice is costing the NHS a “small fortune” and may even be putting patient safety at risk.

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Mr Neil was health secretary for two years until November 2014, having replaced Nicola Sturgeon in the job. He was axed from government last year and yesterday’s paper, entitled a A Stimulus for a National Debate on the NHS, was published by the Options for Scotland think tank.

He said a separate tax specifically targeted at the health service would persuade the public to back it and help the NHS catch up with other “more advanced” European countries.

“The whole British system is in stress and while efficiency savings are needed, they will not be enough, which is why I float the idea of a separate health tax - deeply controversial but cannot be ignored,” he said.

“We haven’t caught up with more advanced European partners and I think at a UK level we have to try and do that, otherwise we are going to face a crisis right across the UK.

“It’s already happened south of the Border and it will get a lot worse everywhere if we don’t put additional resources in.”

Mr Neil said Holyrood should be given the power to create a National Health and Social Care tax to address the issue north of the Border. This would then lead to reductions in the rest of income tax and national insurance contributions.

The NHS already accounts for 40 per cent of the government’s current budget - a proportion that cannot be significantly increased without impacting on other areas, Mr Neil said.

He hit out at the 53 different organisations involved in running the health and care system in Scotland, many with their own senior teams of highly-paid executives.

“It is absurd for a small nation of only 5.3 million people at a time of financial constraint to maintain this level of administrative overhead which is both unnecessarily costly and excessive,” his paper states. It needs to be radically streamlined.”

A generation of doctors now reaching their mid-fifties able to retire on their maximum entitlement, after recent cuts to the pensions system, the paper states. They then return as locums, costing the NHS almost twice as much. A radical overhaul of the “locum industry” is needed to prevent this, with permanent NHS staff offered loyalty payments to ensure they do not lose out.

And a massive £100 million a year could be shaved off the huge NHS drugs bill which the NHS faces each year if all boards managed this as well as the best performing ones.

Mr Neil also advocated increasing the supply of new doctors and nurses by a “substantial number”.

A Scottish Government spokeswoman said there are no plans for a health tax.

But minister say that “record amounts” are being invested and staff numbers are at an all-time high.

The current Health and Social Care Delivery plan is carrying out many of the suggestions in Mr Neil’s paper, the spokeswoman added.

She said: “Scotland is at the forefront of moves to improve the delivery and efficiency and effectiveness of services, including the integration of health and social care.

“We will do everything required to ensure Scotland continues to have world class health care.”

Labour health spokesman Anas Sarwar said: “This is a humiliating intervention for the SNP government. The mismanagement of the NHS by the SNP is now accepted by one of its own backbenchers and a former health secretary.”

Tory health spokesman Donald Cameron said: “There’s no question that the NHS in Scotland needs substantial review and many of these points are worthy of consideration.”