Leading STPs to get 'very modest' £325m capital funding

Philip Hammond said today the investment will be spread over three years, with further funding expected to be announced in the autumn budget for more STPs.

However, the increase has been described as “very modest” by experts, considering the significant capital requirements set out in STP documents.

Analysis of the 44 STP documents has suggested the plans will require more than £10bn of new capital investment over five years.

It is unclear which regions are in line for the initial funding, but areas such as Dorset, Devon and Cumbria have often been described as being more advanced than others.

Anita Charlesworth, chief economist at the Health Foundation, said: “These are very modest additions to the capital budget, at just over £100m in each year. This is after three years in which capital budgets have been raided in order to bail out overspending on revenue budgets.

“Without a major injection in the autumn the NHS is facing the prospect of further cuts to capital given the precarious state of hospital finances.”

Capital budgets are used to pay for investments in physical infrastructure such as buildings and equipment, as opposed to revenue budgets which are used for day to day spending such as staff wages.

The capital budget has been frozen in cash terms over the course of this parliament, and HSJ revealed that it will continue to be raided to prop up the revenue account.

Around £1.2bn was transferred to revenue budgets last financial year, with another £1.2bn this year. A further £1.75bn is expected to be transferred over the next three financial years.

Mr Hammond said: “We recognise the progress the NHS is making in developing sustainability and transformation plans. And we recognise, too, that in addition to the funding already committed, some of those plans will require further capital investment.

“So the Treasury will work closely with the Department of Health over the course of the summer as the STPs are progressed and prioritised.

“And at autumn budget I will announce a multi-year capital programme to support implementation of approved high quality STPs.”

The spring budget document published today said investment decisions will also consider whether each area is “playing its part in raising proceeds from unused land, to reinvest in the health service”.

Meanwhile, Mr Hammond also said £5.9bn has been set aside to protect the NHS from the effects of the changed personal injury discount rate. This relates to clinical negligence claims and means the NHS will face higher pcompensation payments. It is not clear where this money will sit and how it will be distributed.