The autumn budget will force the NHS to make ‘difficult trade-offs’ with ‘no room’ for modernisation or improvement, the Health Foundation has warned.
The increase in funding will only provide ‘temporary respite’ with major issues such as the pace of recovery thrown into question, it said.
In his statement last week, Chancellor Jeremy Hunt also announced he would increase the NHS budget by £3.3bn in each of the next two years, despite NHS England forecasting a £7bn shortfall in funding for next year.
According to the Health Foundation, this will mean that during this parliament – 2019/20 to 2024/25 – NHS spending will increase by around 3% a year in real teams, while for the next two years the increase in the NHS budget amounts to 2% each year.
But the DHSC’s healthcare budget – which includes the NHS budget – will only see an annual increase of 1.2% in real terms for the next two years.
This is lower than the average seen in the decade preceding the pandemic (2%), and falls well below the historical average of around 3.8%.
The Foundation said: ‘Future spending growth at these levels raises big questions over the scale and pace of the recovery with health services facing a cocktail of higher inflation, higher demand, ongoing costs from Covid, staff shortages and challenging efficiency requirements. It also leaves no room for modernisation or improvement.’
The funding for the NHS came alongside £4.7bn for social care, totalling £8bn for system.
Health leaders have on the whole welcomed the increase to the budget as a ‘plug’ for major funding gaps, but have noted it comes at a heavy cost.
Matthew Taylor chief executive of the NHS Confederation, said: ‘In return for the money, the government is asking for challenging efficiency savings and improved performance in areas such as ambulance response times, A&E waiting times and access to general practice.
‘This will be tough but NHS leaders will do all they can to meet the challenge and use the extra money as effectively as possible. But we must be clear with the public that we face a long road to recovery.’
And Saffron Cordery, interim chief executive of NHS Providers, said trust leaders will be ‘keenly aware of the extremely challenging state of wider public finances’.
She said: ‘The impact of double digit inflation will exacerbate the cost of living crisis and consequently, pile on the pressure on the NHS.
‘They have seen first-hand the devastating impact that inflation, cost of living and poverty is having on the staff they employ and the patients they treat.’
On the budget statement, Amanda Pritchard, NHS chief executive, said: ‘While I am under no illusions that NHS staff face very testing times ahead, particularly over winter, this settlement should provide sufficient funding for the NHS to fulfil its key priorities. As ever, we will act with determination to ensure every penny of investment delivers for patients.’