Sunday 10 May 2020 11:20 am

Coronavirus: Britain's pandemic response has nothing to do with funding

Annabel Denham is director of communications at the Institute of Economic Affairs

There have been no good weeks for Britain since the lockdown began, but last week has surely been among the worst. 

On Monday, the news that half of all adults are now being paid for by the state and consternation over how the Chancellor will ever roll back the furlough scheme. On Wednesday, national humiliation as we learnt Professor Neil Ferguson had flouted the mass house arrest he advocated for everyone else. Yesterday, the news that the UK has the highest death count in Europe. And on Friday we learnt that 400,000 surgical gowns ordered from Turkey do not meet British safety standards.

When the reckoning comes, the competence and judgment of those who have (mis)led Britain through the Coronavirus pandemic will be called into question. A litany of failures will be brought to light. 

Read more: PM to outline lockdown relaxation on Sunday

But when bodies like Public Health England come under scrutiny, their defence will likely be unambiguous: underfunding left it poorly equipped to cope when crisis struck. In a state-run system, the distribution of resources will often be dictated by political decisions. Matt Hancock may be flanked by scientists during press briefings but it doesn’t disguise the fundamental reality that, in the court of public opinion at least, the buck stops with him. 

It has already been widely argued that our pandemic response was crippled by cuts to the public health budget. In 2018/19, Public Health England (PHE) had a budget of £4bn, of which £3.13bn was given to local authorities as ring-fenced grants. Yes, like-for-like public health spending by local authorities fell by 17 per cent between 2014/15 and 2018/19. But this has little bearing on the government’s response to Covid-19 because the responsibility for dealing with such epidemics lies with PHE and the NHS.

In fact – PHE’s budget for infectious disease prevention rose from £52m in 2014/15 to £86.9m in 2018/19. Claims that the agency’s handling of the crisis has been hampered due to funding simply don’t hold water.

And while the main complaint about the government’s response to the coronavirus epidemic has been the lack of personal protection equipment (PPE) and the shortage of ventilators and diagnostic testing kits, procurement is the job of the Department of Health (even though one of PHE’s primary duties is to “protect the public from infectious diseases”). Now, you may wish to question why a body designed to shield us from such epidemics isn’t tasked with this job, but that is a different discussion for a different day.

Cutting the public health budget has been repeatedly described as a “false economy”. Public health measures can avert future health problems and therefore prevent future healthcare costs, so the argument goes. A study published in 2017 attempted to put a figure on this claim, reporting that public health measures, on average, produce a return on investment of 14.3 (implying a cash return of 1430%). 

But as a briefing paper out today from the IEA’s Head of Lifestyle Economic Christopher Snowdon points out, this is a misrepresentation. It states: “Most public health interventions are cost-effective if a quality-adjusted year of life is valued at £20,000, but fewer than one in five interventions save money or produce a cash return”.

More than a third of public health interventions would not be approved if they were NHS treatments because they are not cost-effective. Moreover, public health interventions provided by local authorities are less cost-effective, on average, than conventional healthcare. It is not possible to tell from the available data whether England’s public health budget is too small, too large or about right, but many of the arguments made for increased spending on public health are based on a misunderstanding of economics. 

If the UK health system has fallen short in its handling of this pandemic, it is not due to lack of funds. It cannot be assumed that further increases to its budget would have left us better prepared – it is quite possible the money would have been diverted towards the nanny state regulation with which PHE is more fondly associated. When the time comes to assess how Britain fared in this pandemic, ignoring this will only serve as a guarantee of failure in the future.

Annabel Denham is Director of Communications at the Institute of Economic Affairs. False Economies: Myths about Public Health Spending was published on Friday.

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