NHS capital spending will fall by 17 per cent in real terms between 2010-11 and 2014-15, the chancellor said today.

There will be £4.4bn in the NHS’s capital budget for the next three financial years - down from £5.1bn in 2010-11. The cut will follow a £1bn transfer from the DH’s capital budget to its revenue budget which has been ear marked for social care spending.

In a letter to NHS chief executives today, NHS chief executive Sir David Nicholson said: “The settlement will still provide sufficient capital for the major public capital schemes already approved nationally to continue and for the NHS to keep up essential NHS maintenance expenditure.”

The Department of Health said it did not yet know how much would be allocated to specific projects or programmes but three hospital projects were named in the Chancellor’s announcement to the House of Commons.

George Osborne confirmed funding for St Helier in Surrey, The Royal Oldham Hospital and West Cumberland Hospital.

The total costs for those three projects are £343m although not all of this is Department of Health money.

The £219m St Helier decision had already been announced in June and the Pennine Acute Trust said in a press release it was given the go-ahead for the £44m Royal Oldham development in August.

It is not clear how the reductions will affect smaller capital programmes like the Local Improvement Finance Trust programme.

Chris Whitehouse, chair of the LIFT Council which represents bodies involved in the primary care schemes, said: “The need to cut public expenditure will mean that departments including the NHS are expected to get the best possible value from their existing premises. LIFT providers have demonstrated that they possess the property management skills to deliver these efficiencies for the public sector”

Head of health at consultancy EC Harris Conor Ellis said: “Most members of the health community expected something similar. The capital programme will have to be focussed around backlog maintenance. The real issue is making sure you use what you have got effectively.”

In January, then health minister Phil Hope confirmed the NHS’s backlog maintenance cost for 2008-09 was £4bn.

The spending review document in full