Labour has challenged the government’s claim to have protected spending on the NHS, claiming that when the cost of social care is taken into account the health service is in fact facing a £500m real-terms cut in funding.
The NHS was one of only two areas to be “ring-fenced” from cuts in George Osborne’s spending review last month, when the chancellor said the government was “honouring in full” the coalition’s commitment to increase health spending every year over and above inflation.
However, research from the House of Commons library suggests that this is true only because Mr Osborne also announced an additional £1bn a year to be provided through the NHS for social care, which has traditionally been provided by councils.
If this money were deducted from the total NHS budget, the cash remaining for health would fall by £500m between 2010-11 and 2014-15 after inflation is taken into account - a real-terms reduction of 0.54%, the Commons library said in response to a question from shadow health secretary John Healey.
“Including the funding is critical to the description of the settlement as a ‘real terms increase’,” said the researchers. “Without it, funding for the NHS falls by £500m (0.54%) in real terms.”
Mr Healey said: “By all means point, as ministers do, to the extra money for social care.
“But don’t double count the credit and don’t double count the funding.
“Because when £1bn switched from the NHS to social care is taken into account, the government has not protected the NHS as it promised. It’s not the real terms increase of 0.4% they claimed. It’s a real terms cut of 0.5%.”
Mr Healey told the Daily Mirror: “David Cameron has been caught out.”
“In contrast, as I announced in the spending review, the NHS budget will rise by 0.1% in real terms after inflation in each of the next four years. That is a total increase of 0.4% over the next four years.
“Within that budget, the money going out to the NHS for resource spending will also increase by 0.3% a year in real terms. That includes an extra £0.8bn, £0.9bn, £1.1bn, £1.0bn (in successive years) for measures like re-ablement which support social care and benefit health, paid for by a reduction in NHS capital.
“Even were we to omit this extra funding, NHS resource spending would still rise by 0.1% a year in real terms. This is all set out clearly enough in the Treasury’s Green Book.
“So, as I said before, even if we did not treat the extra money as NHS money there would still be an increase in the resource funding available to the NHS in real terms each year.”