Healthcare

Healthcare

As we know, last year the higher rate of income tax was raised by 2% from 20% to 22%.

It’s estimated that generated £20 million, which was ringfenced for the health service.

At the time, the treasury minister described it as a ‘transition tax’, which he hoped to replace with what he called an ‘NHS levy’ in the future.

That healthcare levy is not being introduced in this Budget.

In November, Alex Allinson admitted it’s been ‘far more complicated’ than he thought to implement.

He also ruled out removing the increase to the higher rate of income tax while it was worked on.

Now, while it still won’t be removed, the higher rate of income tax will go down slightly from 22% to 21%. 

The intention is to still ringfence that extra 1% for healthcare but an additional National Insurance allocation of £18 million will be given to Manx Care via the DHSC. 

A consultation is due to be launched into the creation of a healthcare levy to help address the growing cost of the NHS.

Healthcare Transformation Fund

Meanwhile, £4 million is being proposed to be added to the Healthcare Transformation Fund to continue supporting the ongoing work of implementing the recommendations in the Sir Jonathan Michael Report.

Contingency Funding

Treasury has a revenue contingency budget which can be accessed if a ‘robust’ business case is presented by departments or boards if they face unanticipated costs that they can’t absorb within their planned budgets.

The level of this fund has been set at £19.7 million for 2025/26.

£14 million of this contingency funding has been included specifically for potential Manx Care cost pressures.

Manx Care

Manx Care’s budget increases each year using a specific funding formula, which currently sits at 5.23%.

That means it’s adding £11 million to its budget this year, raising to £371.5 million, including the £14 million contingency fund.