‘Urgent’ questions over NHS Budget deal

NHS England’s budget is set to rise by 5 per cent in real terms this year, and just over 3 per cent in 2025-26 according to budget documents.

However, crucial details such as how much will be eaten up by pay awards and the Chancellor’s decision to increase employer’s National Insurance contributions have yet to be revealed.

The latter will add billions to the NHS cost base over the course of the next few years.

A Treasury spokesman said the public sector would receive additional funding to compensate for the impact of the changes. They said this was still being worked on, and allocations for each department would be confirmed “shortly.”

The Budget did not provide any certainty over timescales for Labour’s pledge to deliver 40,000 extra appointments a week, and whether funding will be available this year for trusts to continue carrying out extra elective appointments.

Rachel Reeves said the uplift added up to nearly £23bn in additional Department of Health and Social Care day-to-day spending over two years.

However, the figure appears to include additional funding already allocated, such as extra cash for trusts that surpassed their elective targets.

The Treasury to HSJ confirmed just over £3bn had been transferred to the DHSC already. This included £1.8bn since July for Elective Recovery Fund “over-performance,” activity above agreed elective targets, and an earlier £1.5bn for waiting lists and “wider DHSC pressures”.

Documents released by the Treasury showed the NHSE budget for 2024-25 was now £181bn, up from the original £165bn. But this did not reflect the costs of the unbudgeted pay rise made by the new government, nor current levels of over-performance.

The latest, pre-budget financial report predicted its spend in 2024-25 would be £179bn.

One senior source at NHSE expressed alarm at the lack of detail on how funding would be allocated despite months of discussion between government and the national commissioner, and said the issue needed to be “urgently” resolved.

Meanwhile, the increase pencilled in for 2025-26 remains lower than the historical average, the Office for Budget Responsibility said.

The spending watchdog noted revenue spending plans were “significantly frontloaded” and said the 3.3 per cent real terms for the NHS in 2025-26 was “below the average annual real growth in spending since the 1950s.”

Budget documents said the funding would “support” the delivery of Labour’s manifesto pledge for 40,000 extra appointments, which was widely reported to be by July, but gave no date for this commitment.

The Treasury also said the funding would also help “make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment”.

Ms Reeves also pledged a major increase to health capital taking total planned spend to £13.6bn next year. This includes £100m pledged for GP practice upgrades.

An additional £600m was allocated for social care but much of this is also likely to be swallowed by higher employers’ taxes and a rise in the National Living Wage.

Siva Anandaciva, chief analyst at The King’s Fund, said: “The Chancellor has said that ‘change must be felt’, but the health spending announced today is unlikely to be enough for patients to see a real improvement in the care they receive… [it] is unlikely to drastically improve care over the rest of this year, and certainly not overnight.

“…On the whole, this budget has been a starting point for the investment and reform that is needed to begin to stabilise the trajectory of NHS performance, but it is not enough for the system to deliver the wholesale shift needed for a health and care system fit for the future. To achieve that, more funding will be needed in next year’s comprehensive spending review.”

Nuffield Trust director of research and policy Becks Fisher said: “Government is right to want to shift care from hospital to community, but with most funding released today seemingly targeted towards hospitals, eyes will turn to the Spending Review to secure money needed for transformation.

“Increases in local authority budgets are welcome, but they face hugely difficult decisions on where to spend to meet myriad local needs. The £600m social care grant announced for next year will be insufficient to enable councils to keep pace with demand.”