The think tank says that with the older population growing rapidly, along with the numbers suffering chronic health problems, and a growing pay and drugs bill, demands on the health service will only continue to grow.

Health spending must increase from £154bn currently to £249bn in 2034, or 3.3% a year, just to maintain the level of service at present.  This would mean health spending rising faster than national income and would take health spending from 7.3% of national income today to 8.9% of national income by 2033–34.

However, to counter chronic underfunding, the IFS suggests a short term boost of 4% each year over the medium term, with 5% annual increases in the short run.  This would take spending in 2033–34 to 9.9% of national income, an increase of 2.6% of national income relative to 2018–19.

IFS said that government spending on health rose from 3% of national income in the 1950s to 5% by the year 2000 and over 7% today without needing to increase overall public spending, or the overall tax burden, as a share of national income.

The report noted: ‘That was possible because of sharp cuts in spending on other services, particularly defence. It is very hard to see how higher health spending in the future could be financed by big cuts to other areas of public spending, especially after eight years of austerity.’

The think tank calculates that funding these projected increases in health spending through the tax system would require taxes to rise by between 1.6% and 2.6% of GDP –which is between £34bn and £56bn in present-day terms, equivalent to between £1,200 and £2,000 per household. There would need to be an additional rise of 0.4% of national income to meet the pressures on social care.

The IFS says this would take the tax burden to historically high levels by UK standards, but not especially high by continental European standards. The think tank argues it is hard to see how tax rises of this scale could be implemented without increases in at least one of income tax, NICs and VAT.

Paul Johnson, director of IFS and an author of the report, said: ‘If we are to have a health and social care system which meets our needs and aspirations, we will have to pay a lot more for it over the next 15 years. This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax.

‘But it is a choice: higher taxes and a health and social care system which meets our expectations and improves over time, or taxes at current levels and a more constrained health service delivering less than we have become accustomed to.’

The IFS report is lukewarm on the idea of introducing a hypothecated tax dedicated to funding the NHS, which has gain popularity as evidence grows that the public would be more willing to pay taxes if they were guaranteed to fund the NHS.

The report stated: ‘If this could be done in a way that led to a predictable funding stream for the NHS, there might be a case for it. But it is hard to design a hypothecated tax that is simple, predictable and transparent.’

Securing the future: funding health and social care to the 2030s is here.

Report by Pat Sweet