The chancellor Rachel Reeves has announced a £29bn real terms funding boost for the NHS over the next three years, in her spending review today.
This equates to a 3% increase in annual day-to-day spending from 2023/24 to 2028/29, making the spending £226bn by the end of the period.
She added there would also be a £2.3bn real terms increase in the Department of Health and Social Care’s (DHSC) annual capital budgets from 2023/24 to 2029/30, which would include money for new technology, primary care and hospitals.
The chancellor also pledged additional funding by 2028/29 for the training of ‘thousands more GPs’, and an increase in funding of £4bn for adult social care in 2028/29, compared to 2026/26.
‘This includes an increase to the NHS’s minimum contribution to adult social care via the Better Care Fund, in line with DHSC’s SR settlement. This will support the sector to improve adult social care provision, with further details to be set out shortly,’ the spending review said.
Technology and digital transformation is also set to get ‘up to £10bn’.
Announcing the spending review 2025 in the House of Commons, Ms Reeves said: ‘We are shifting care back to the community, providing more funding to support the training of thousands more GPs to deliver millions more appointments.
‘I am proud to announce today that this Labour Government is making a record cash investment in our national health service, increasing real terms day to day spending by 3% per year for every single year of this Spending Review, an extra £29bn per year for the day to day running of our health service.’
The review added that the DHSC has committed to delivering at least 5% of savings and efficiencies over phase two of the review period.
‘This includes savings and efficiencies identified through the department’s zero-based review (ZBR) and the technical efficiencies which DHSC has worked with the Office for Value for Money (OVfM) on,’ it said. ‘This includes £17 billion savings over three years released by achieving 2% productivity. The NHS will also reduce the need for temporary staff by setting limits on agency spend, including eliminating agency usage for entry level roles. This will build on the near £1 billion reduction in agency spend delivered in 2024-25.’
The Spending Review sets out planned day-to-day spending totals for all government departments for the years from 2026/27 to 2028/29, and investment spending plans for a further year (from 2026/27 to 2029/30).
In response to the review, Sarah Woolnough, chief executive of The King’s Fund, said: ‘Despite the tough economic climate, the government has prioritised health services by continuing to increase spending on the NHS for the rest of this parliament. A 2.8% average increase in total health department spending – 3% for day-to-day NHS spending – will have been hard-fought for in the spending round negotiations, despite still being lower than the historical average the NHS has received over recent years. A key challenge now will be for NHS to decide how it can deliver most value from the money that has been allocated.
‘We know there are already trade-offs happening in the NHS due to tight finances. The Chancellor said she wants the public to have ‘an NHS there when they need it’. It is hard to see how all the things she mentions – faster ambulance times, more GP appointments and adequate mental health services and more – can be met on this settlement alone. Particularly when large parts of this additional funding will be absorbed by existing rising costs, such as the higher cost of medicines, which are currently being negotiated, and covering staff pay deals.
‘But there is a huge opportunity offered by the government’s upcoming 10 year plan for health, so we will wait to see how this money will be translated into better, more efficient services.’
It comes as ICBs have begun to announce their intentions to cluster with each other, as part of their plans to cut costs.
