Secret Cabinet Office report was key to unlocking Treasury coffers

After a year of lobbying both the prime minister and chancellor, health and social care secretary Jeremy Hunt achieved his aim of securing a new five year funding deal for the NHS on Friday evening after last minute talks at 10 Downing Street also attended by NHS England chief executive Simon Stevens.

It followed months of at times tense negotiations and appeals by Mr Hunt, including concerns at Number 10 that he might resign after Treasury officials insisted on growth of less than 3 per cent - a level unacceptable to the DHSC and NHS England.

HSJ can reveal the key to persuading the prime minister to back Mr Hunt was an independent review by the Cabinet Office, led by senior civil servant Hugh Harris last year. It concluded annual growth of at least 3 per cent was needed.

HSJ understands this helped break the deadlock between the two departments and overcome the reluctance of the Treasury which discounted funding submissions from the DHSC.

It won the backing of the prime minister and led to her promising a committee of MPs in March that she would bring forward a long term plan for funding the health service.

Mr Hunt began his lobbying last year when he publicly called for an end to pay restraint for NHS staff and was privately warning of the dire situation in NHS finances.

Over the same period most health and care organisations have also been warning ever more vocally about funding, including Mr Stevens.

HSJ understands the chancellor Philip Hammond did not resist the idea of providing more money for the health service but was concerned over the economic consequences of Brexit and how the plans would be funded.

This set the scene for difficult negotiations and at one stage the Treasury was understood to have ruled out tax rises. There were concerns in Number 10 that Mr Hunt could resign if the 3 per cent annual growth was not reached.

HSJ understands it was these ongoing negotiations that were decisive in Mr Hunt pointedly refusing to be moved from his position in January, as he feared any incoming new health secretary would struggle to close the deal.

The funding settlement was agrees by 5.30pm on Friday with the Treasury committing to find new tax rises in November’s budget and to use part of the so-called “Brexit dividend” of cash no longer being paid to the EU after March next year.