Instruments drawn to the special attention of the House
Draft Immigration (Health Charge) (Amendment) Order 2018
Date laid: 11 October 2018
Parliamentary procedure: affirmative
When the Immigration Health Charge was first introduced in 2015 this Committee questioned why, at £200 per person per year, it was so far below the estimated cost of the service provided (£800 per person per year). This Order revises the level of the charge to £400 per person per year (£300 for students) based on a revised estimate of the actual cost of treatment as an average of £470 per charge payer per year (We note that these estimates of the cost exclude people such as trafficking victims or asylum seekers who might have more complex health needs, as these groups are exempt from the charge.) Three years later, it is still not clear to us why the Home Office takes the view that those coming to the UK for more than six months should only pay “a contribution” to NHS costs rather than a sum set to fully recover the average costs incurred. The House may wish to ask the Home Office Minister to justify this subsidy.
This Order is drawn to the special attention of the House on the ground that it raises issues of public policy likely to be of interest to the House.
1.The Order has been laid by the Home Office under the Immigration Act 2014 and is accompanied by an Explanatory Memorandum (EM) and an Impact Assessment (IA). Additional information about the operation of the scheme is included in Annex 1 of this report.
Background
2.The Immigration Health Charge is a levy placed on temporary migrants from non-EEA countries (Australia and New Zealand excepted) as a contribution to the costs of the National Health Service (NHS) while the person is in the UK. The charge was first introduced three years ago and the Government are now seeking to double the amount of the annual charge to £300 a year for students and £400 for everyone else. The Order also establishes that where the charge is paid in a currency other than sterling the Home Office exchange rate will apply.
3.When the charge was originally introduced in 2015 we drew the matter to the attention of the House,1 questioning why it was set at £200 per person per year, significantly below full cost recovery levels, then estimated at £800 per person per year.
Revised charges
4.According to paragraph 7.4 of the EM, following a review by the Department of Health and Social Care (DHSC), the estimate of the average actual cost to the NHS in England per charge-paying migrant has been revised to £470 per year. Although the gap is smaller, at £400 per person, the charge proposed by this Order is still set below the level for the full recovery of costs. The IA provided with the Order notes that this is also below the manifesto commitment to raise the charge to £600 per person.
5.The IA supporting the Order states that in 2015–16 the revenue for the UK from the charge was £164 million and £204 million in 2016–17 with similar revenue levels expected in subsequent years. The increased charge is expected to raise an additional £220 million per year for the NHS.
The estimated costs
6.Page 4 of the IA quotes a slightly different average cost figure of £480 per person per year and gives more information on how the DHSC calculated that figure. It says the department looked at actual data on the cost to the NHS from treating charge payers who used the NHS from April 2015 to December 2017, their length of the stay, and their estimated average treatment costs. The average figure is a weighted average across all charge payers including both those who used and those who did not use the healthcare services:
“The estimated average cost for primary and secondary care and some other services [for example ambulance, public health, community and mental health services] across all charge payers (including those who did not access health services) was around £480 per person per year (an estimated £310 on secondary care and £170 for primary care per person). The average cost to the NHS of those who used secondary care was around £1300 [this is a subset of the total number of charge payers].”2
7.While acknowledging that the revenue to the NHS will be increased, it is still not clear to the Committee why the charge remains below the full cost of supplying these services.
Home Office policy
8.The Home Office policy is that temporary migrants should make “a contribution” to the costs of any NHS healthcare used while in the UK. We asked the Home Office to articulate the policy decision more clearly than in paragraph 7.4 of the EM. The Home Office replied:
“The Government intends to double the annual surcharge amount so that it reflects better the financial impact that surcharge-payers have on the range of NHS services available to them. But it has never been the intention of the surcharge policy that the level of the surcharge should operate as a full cost recovery measure for individuals … . This would still be a lower level than equivalent charges on average operated in other comparable countries. The proposed change is consistent with the stated policy intent of ensuring non-EEA migrants make a ‘fair contribution’ towards the cost of the NHS services available to them, commensurate with their temporary immigration status.”
9.We found this reply disappointing because it appears to us simply to restate the policy rather than explaining the rationale behind it.
Conclusion
10.When the Immigration Health Charge was first introduced we questioned why it was so far below the estimated cost of the service provided. Although this Order doubles the charge, and the estimate of cost of treatment is lower, it still does not fully recoup the revised estimate of the average cost of treatment to these charge-payers. We note that the estimate of the cost excludes people such as trafficking victims or asylum seekers who might have more complex health problems, as these groups are exempt from the charge, and therefore not taken into the calculation of costs. Three years later, it is still not clear to us why the Home Office takes the view that those coming to the UK for more than six months should only pay “a contribution” to NHS costs rather than a sum set to fully recover the average costs incurred.
11.In relation to the revised charges, in a Written Statement on 11 October 2018, the Minister, Baroness Williams of Trafford, said: “The proposed amount is still below full average cost recovery level and remains a good deal for those seeking to live in the UK temporarily”.3 The House may wish to ask the Home Office Minister to justify this subsidy.
1 27th Report, Session 2014–15 (HL Paper 120).
2 Secondary care services are usually based in a hospital or clinic as opposed to being in the population and patients are usually referred to secondary care by a primary care contributor such as a GP.