NHS deputy chairman warns funding rises ‘cannot continue’

A deputy chairman of NHS England has suggested the health service should be funded by social insurance or private equity – as he questioned “where the hell” spending rises will end.

Wol Kolade said Britain needs an urgent rethink about how the NHS is funded and called for a “big conversation” about its future.

The senior figure, one of the leading non-executives on the board of NHS England, warned the health service faced “epic” cost rises and could “crash” without the right steps being taken.

The NHS chief, who is also a managing partner at London-based private equity firm Livingbridge, said the kind of funding rises being ploughed into the health service in recent years were not sustainable.

“We can essentially no longer continue to fund at the rate at which we need,” he told Private Equity News.

“When I joined the board in 2018 it was something like £110 billion. This year it’s £160 to 170 billion

“That sort of rate of growth cannot continue. Where the hell is it going to stop? £250 billion? £300 billion?”

“At what point do you say, will you think about the way we provide this? Is it a mixture of social insurance or some sort of private solution? It’s a big conversation.”

Mr Kolade said he expected to see increases in private investment in the NHS to deal with “unconstrained demand and very limited supply”.

“Science has moved on so much that we can pretty much keep you alive indefinitely and the cost of that is epic. We’re not having that conversation as a nation.”

He added: “This cannot continue. Who has the bravery to have that conversation? Where will it take place? It needs to take place.

“We’re going to get there. It’s just whether we get there in a controlled manner or a crash.”

Mr Kolade’s appointment as deputy chairman of NHS England by the Government in 2022 prompted accusations of cronyism, as he had donated around £730,000 to the Conservative Party in the previous seven years.

Before that, he was a non-executive director on the NHS improvement board in 2018 and was formerly chair of the £1 billion Guys and St Thomas’ Foundation, one of the UK’s largest medical endowments.

Privatisation ‘doesn’t make sense’

In the interview, Mr Kolade dismissed suggestions that the NHS was going to be privatised.

He said: “People get very stressed about the NHS being privatised. It doesn’t make any sense. If you add up all the independent capacity in the entire UK, it’s less than 10 per cent of the NHS. There’s no danger of it being privatised.”

Livingbridge, where Mr Kolade is a managing partner, has made a number of investments in UK healthcare in recent years.

In 2021 it invested in a provider of NHS wheelchair services in England, AJM Healthcare, and a teleradiology group that provides services across the UK, Australia, New Zealand and Ireland.

In recent years, private equity firms have ramped up investments in UK companies offering services to the NHS, amid mounting backlogs in the wake of the pandemic.

Record numbers of people are also paying for private healthcare, figures show.

Last year, 272,000 patients in England paid upfront for operations or diagnostic procedures at a private hospital, an increase from the 199,000 who did so in 2019, the year before the Covid pandemic struck.

Meanwhile, 547,000 received treatment via a private medical insurance policy – the highest since 2019, according to figures from the Private Healthcare Information Network.

Earlier this month figures showed private hospitals are doing one in 10 of all planned NHS operations amid patients’ frustration at long delays in NHS care.

Private operators carried out a record high of 1.67 million procedures on NHS patients in 2023 – a 29 per cent rise on 2019’s figure of more than 1.3 million, according to the Independent Healthcare Providers Network.