Govt cuts £330m from NHS budget and gives it 13 priorities

A settlement was finalised yesterday, with the publication of the government’s NHS England Mandate and final budget for 2022-23.

The mandate also sets out 13 priorities for NHS delivery in the year, but confirms its objectives will be reset in an “NHS long-term plan update” to be agreed between government and NHSE and “published in summer 2022”.

In February, it was reported the Treasury refused to increase the DHSC’s funding envelope to pay for ongoing covid testing in 2022-23, and it is thought the dispute ended with the DHSC receiving at least £1bn less than it believed it required to cover costs. 

Last week, NHSE chief finance officer Julian Kelly told the organisation’s public board meeting it had been asked to reduce its spending plans by around £500m to help make up the difference in the wider DHSC budget. It would likely mean slowing down planned improvements in technology, prevention and innovation, he said.

HSJ  understands negotiations ended in time for the mandate to be published yesterday, with NHSE’s budget being reduced by £330m compared to previous plans.

The mandate is required to be published by 31 March and to set NHSE’s spending limit for the year, as well as its objectives.

While the reduction is not made clear in the document, HSJ was told it has been cut by £330m compared to the sum agreed in the 2021 spending review, and after other adjustments such as for increased employer pensions costs.

It is understood NHSE has not yet finalised how it will be funded. As well as potential delays to service plans, it may also mean NHSE has less contingency if local NHS deficits emerge during the year, as is widely expected.

A DHSC spokesman said: ”The government has set out its mandate and funding for NHS England for the year ahead, which will help us recover services impacted by the pandemic.

“The government is committed to tackling the Covid backlog, and we have already invested £2 billion this year to support the NHS’ elective recovery, plus an extra £8 billion over the next three years.”

Objectives

The mandate includes five overall objectives: managing the impact of covid; recovering and maintaining non-covid service delivery; renewing delivery of the long-term plan and other government commitments; population health and prevention; and effective leadership, culture and structural change.

The third objective – on delivering the long-term plan and other commitments – says: “The [long-term plan] continues to be the guiding strategy for the NHS… [But] the pandemic required the NHS to accelerate delivery of some elements of the plan. For other commitments, the challenge to deliver them has increased.

“As the impact of covid-19 continues to emerge, the government and NHS England are working together to ensure that the commitments in the plan reflect the context the NHS faces in 2022. An update to the [LTP] – including revised delivery expectations for relevant commitments – will be published in summer 2022.

“The update will set out realistic goals for… delivery, incorporating a degree of local flexibility that recognises the role of integrated care boards.”

However, it says, in the meantime, the NHS “will continue to be assessed against [13] priority commitments” (see box below).

12.50pm 1 April: Updated to correct figure