- Health committee chair called on ministers to stop using “incorrect” £10bn figure to describe additional NHS spending
- Chancellor says the claim always referred “specifically” to the NHS, rather than the DH
- Department of Health budget is increasing by £4.5bn in real terms over five years
The chancellor has reinforced the government’s position on NHS finances in a letter to the Commons health committee.
Philip Hammond was responding to committee chair Sarah Wollaston, who last month asked ministers to stop using the “incorrect” £10bn figure to describe additional NHS spending.
The Nuffield Trust, the King’s Fund and the Health Foundation have also described the government’s claim as “inaccurate”.
However, Mr Hammond said today: “The government has not claimed that the Department of Health itself would receive £10bn above inflation; it has always referred specifically to the NHS. Our decision to focus investment on the NHS is deliberate – it reflects our desire to prioritise frontline services…
“To kick start the Five Year Forward View plan, £6bn of the £10bn increase will be given to the NHS by the end of 2016-17. This is exactly in line with what the NHS asked for, as [NHS England chief executive] Simon Stevens has noted, saying ‘this settlement is a clear and highly welcome acceptance of our argument for frontloaded NHS investment’.”
While the NHS England budget is set to increase by £10bn – from a 2014-15 baseline and over the six years to 2020-21 – overall spending by the DH will only increase by £6bn, due to other budgets, such as public health, being cut.
In last year’s spending review, the government redefined the ringfence around “NHS spending” to only include the NHS England budget, which left the door open for cuts to other health budgets.
The 2015 Conservative manifesto appears to have been carefully worded with this in mind.
It noted how “health” spending had increased by more than £7bn in the previous parliament – referring to the overall DH budget – but it then said: “We are able to commit to increasing NHS spending in England in real terms by a minimum of £8bn over the next five years.”
It did not explain the change to the ringfence or suggest that other DH budgets would be cut in real terms.
Meanwhile, an NHS England report that set out the financial gap that was cited in the forward view assumed that the “health budget will remain protected in real terms”.
Dr Wollaston had also criticised the use of 2014-15 as the baseline year for additional funding, saying this added to the false impression that the NHS is “awash with money”.
The forward view was published in 2014, but the five year period it relates to is 2016-17 to 2020-21 – so the baseline year is generally understood to be 2015-16.
Mr Hammond wrote: “As you know, the forward view asked for a minimum increase of £8bn in NHS funding by 2020-21, and for it to be frontloaded to allow the NHS to invest in, for example, new models of care. The government has delivered what was asked for on both counts…
“The £10bn figure has been determined using a 2014-15 baseline. This is the baseline year that is used for the Five Year Forward View itself.
“And this approach also takes into account the fact that we started funding the Five Year Forward View soon after it was published in October 2014: specifically, the government provided at autumn statement 2014 additional funding for the NHS in 2015-16, in response to the funding gap identified in the Five Year Forward View.”
Mr Stevens has previously said the NHS “didn’t get what we originally asked for” in the middle years of the forward view, while two of the five “tests” that need to be met to deliver the plan – around social care and public health – have not yet been met.