Hypothecated funding for health and social care

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how might it work?

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Hypothecation – the earmarking of a tax to be spent on a specific area of public expenditure – is back on the political agenda. All the major parties seem agreed that a longer-term and sustainable settlement for NHS expenditure – and quite possibly one for social care as well – is now desirable. Hypothecation is being debated, across the political parties and by other think tanks, as one of the routes by which the money for that could be found. There are strong advocates and equally strong opponents of hypothecation. This short paper examines both sides of the argument. It seeks to set out the problems hypothecation is meant to solve, and the conditions under which it might do so, and provides a brief history of hypothecation in the UK.

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