Treasury raids NHS capital budget to fund social care

A spokeswoman for the Department of Health told HSJ the funds had been transferred from the NHS capital budget but would be spent on social care, either through the NHS itself or local authorities

The spending review, delivered to Parliament by chancellor George Osborne, said that £800m of funds now transfered from the DH capital to revenue budget would be spent on social care next financial year.

The year after next will see £900m spent in the same way, with £1.1bn being spent in 2013-14 and £1bn in 2014-15.

The £1bn is included in the £114.4bn cash figure recorded as the DH’s total budget for the NHS in 2014-15. Over the four years the overall increase to the budget is equivalent to a 0.4 per cent real terms increase.

However if the £1bn ear marked for social care spending is removed, the real terms change figure for the NHS is a 0.6 per cent cut over the period.

The £1bn being transferred from the DH capital budget is in addition to an extra £1bn - found from across government - that will be added to the local authority revenue support grant by 2014-15. The funds are earmarked for social care but are not ringfenced.

In a letter to directors of adult social services explaining the plans, DH director general for social care, local government and care partnerships David Behan said the additional NHS funding for social care “includes up to £300m per annum for re-ablement to help avoid demand upon social care, while the remainder will be used to support other social care services”.

The chancellor said: “Some in local government have concerns about the financing of social care.

“I can announce that grant funding for social care will be increased by an additional £1bn by the fourth year of the spending review.”

The spending review document said the additional £1bn being “set aside” by the NHS by 2014-15 would “fund new ways of providing services, including reablement services provided by the NHS”.

“This will help to break down the long-standing barriers between health and social care.”

The chancellor claimed that meant “a total of £2bn additional funding for social care to protect the most vulnerable”.