The Department of Health and Social Care (DHSC) will receive an extra £22.6 billion for day-to-day spending over the next two years, £21bn of which will be for NHS England, the chancellor confirmed in the autumn budget today.
There will also be a £3.1bn increase in capital investment for 2025-26 compared to 2023-24, up to £13.6bn overall. Within this, there will be £1.5bn in capital funding for new surgical hubs and diagnostic scanners, which was announced earlier this week, £100 million for upgrading 200 GP estates across England, and £26m to open new mental health crisis centres to reduce pressures on A&E services.
In the autumn budget, delivered in the House of Commons today, chancellor Rachel Reeves set out the plans to ‘fix the NHS’ and to help deliver their manifesto promise of creating an extra 40,000 elective appointments each week.
The chancellor reiterated plans to shift care from hospital to community, to move from analogue to digital and towards a preventative model of care.
Ms Reeves also announced the ‘difficult decision’ to increase the rate of employer National Insurance contributions (NICs) by 1.2 percentage points to 15%, as well as a 6.7% increase to the National Living Wage, which will be £12.21 from April 2025.
Despite the £22.6bn boost to day-to-day spending, the chancellor also asked the DHSC and all other departments to meet a 2% efficiency target in a bid to ‘save billions of pounds’.
Speaking in Parliament today, Ms Reeves said that the extra £22.6bn for health is possible due to ‘difficult decisions’ on tax, welfare and spending.
‘This is the largest real-terms growth in day-to-day NHS spending outside of Covid since 2010,’ she said.
The chancellor added: ‘Many NHS buildings have been left in a state of disrepair, so we will provide £1bn of health capital investment next year to address the backlog of repairs and upgrades across our NHS.’
She also referenced Lord Darzi’s recent investigation into the NHS which found that it had been ‘chronically weakened’ by a lack of capital investment, with an overall shortfall of £37bn, which ‘could have rebuilt or refurbished every GP practice in the country’.
In response to the budget, Siva Anandaciva, chief analyst at The King’s Fund, said: ‘This budget has been delivered among a backdrop of dire NHS performance and extremely tight public finances.
‘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. The 3.8% real-terms uplift over two years to the Department of Health and Social Care budget will help sustain services but is unlikely to drastically improve care over the rest of this year, and certainly not overnight. That’s because the £22bn for two years allocated for day-to-day spending will also need to cover existing commitments for new staff pay deals and rising costs of delivering care.’
On capital investment, he said this would go ‘some way’ towards reducing waiting lists.
‘However, the existing backlog of NHS maintenance issues with buildings and equipment is a staggering £13.8 billion and the extra funding announced today will only be a modest downpayment on what is needed to tackle unsafe and outdated NHS facilities,’ he added.
‘The additional £600m announced for social care will be welcomed by the sector but is substantially less than what has been allocated to the NHS – many social care leaders will look on with envy at the funding their health service colleagues have received. Care providers will also have to shoulder extra employer costs from national insurance changes and minimum wage increases, exacerbating the difficult financial position they are in.
‘It is positive to see the government using its fiscal and regulatory tools to help improve the nation’s health, including increases to tobacco duties and the soft drinks levy. But the government has chosen to provide little clarity on overall budgets to support public health services.’
He concluded that the budget was a ‘starting point’ for the investment and reform needed, but that it was ‘not enough’ for the system to deliver the ‘wholesale shift needed for a health and care system fit for the future’.
NHS Providers’ deputy chief executive, Saffron Cordery, added: ‘Today’s budget provides a welcome boost for NHS trust leaders and their teams who are working flat out to improve services, reduce waiting lists and see patients as quickly as possible. The government has recognised the importance of the NHS to the health of the nation and the economy.’
However, she said ministers must be ‘realistic’ about the speed of progress.
‘Today’s economic challenges in the face of rising demand across hospital, mental health, community and ambulance services mean services, having to find unprecedented savings, are in a very tough position,’ she said.
‘Almost £14billion is needed to plug a rocketing backlog of NHS repairs. Vital bits of the NHS are literally falling apart, putting quality of care and sometimes the safety of patients and staff at risk. We welcome the government’s commitment to prioritise increasing capital investment across the NHS.’
She added: ‘The devil is often in the detail and it will be critical to ensure that welcome funding increases fall where they are needed, including to bring down waits for mental health and community services and to improve ambulance performance.
‘Social care needs urgent attention too. That can can’t be kicked down the road any longer. An underfunded, overstretched social care sector needs urgent reform and more resources not just to give people the care they need but to help to ease mounting pressure across the NHS.
‘The government’s promised 10-year plan for the NHS, with a shift to more community-based healthcare and prevention of ill-health, is a chance to get to grips with the challenges facing health and social care so that trusts can make improvements faster and give people the right care in the right place at the right time.’
Last week, a national consultation to shape the NHS’s 10-year plan was launched. Prime Minister Sir Keir Starmer said today that while the government has ‘a clear plan to fix the health service’, it was ‘only right that we hear from the people who rely on the NHS every day to have their say and shape our plan as we deliver it’.
