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Health budget ringfence extended to 2015-16

George Osborne today committed to extending the health budget’s relative protection from government spending cuts to 2015-16 – the first year of the next spending review period.

The chancellor’s autumn statement, published this afternoon, confirmed that the government would set an overall public spending envelope for 2015-16 of £745bn – cutting real terms spending at the same rate as has been set for 2010 to 2015.

The statement said that detailed plans – including the breakdown of spending cuts between government departments in 2015-16 – would be revealed in the first half of next year.

“However,” it added, “the government will operate on the principle that departmental resource budgets will continue on the same trajectory as over the period of the Spending Review 2010.

“In line with the policy set at spending review 2010, spending on health, schools, and [overseas development assistance] will be protected from further reductions.”

The news came as the chancellor revealed plans to cut most departments’ budgets – not including the department of health’s – by a further 1 per cent next year, and 2 per cent in 2014-15. The statement said the cuts would save £980m in 2013-14 and £2.4bn in the following year, that would be used for additional investment in infrastructure and support for business.

Mr Osborne told MPs: “We will continue to seek efficiency savings in the NHS and in our schools, but that money will be recycled to protect spending in these priority areas.”

The chancellor’s statement also confirmed that the government now expected total public spending to continue to fall at the same rate until the end of 2017-18, a year later than previously planned.

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