Additional funding for the NHS announced

Prime Minister Theresa May has announced additional funding for the NHS to mark its 70th anniversary. The funding, which will see NHS England’s budget increase by £20 billion by 2023, will be paid for via tax rises in addition to economic growth and a ‘Brexit dividend’ (the latter of which has been questioned given that Brexit is expected to result in a deficit). In a speech at the Royal Free Hospital in London, Theresa May set out the following commitments:

  • £20.5 billion funding annually by 2023, representing a 3.4% increase.
  • An additional £390 million funding in real-terms compared to today.
  • NHS funding will grow faster than the economy, demonstrating it as a spending priority for the Government.
  • Social care and public health budget announcements will be included in the next spending review.
  • A ten-year plan for the NHS must include consideration of the adoption of new technologies (linked to the Industrial Strategy) and ensuring that the regulatory framework supports a responsive health system.

Pressure on the Government to address funding pressures had been growing in recent months. Commenting in the Health Service Journal (HSJ) on the announcement, Andy Cowper noted that the 3.4% budget rise was not in line with stakeholder calls that an estimated 4% was required to maintain services standards and 5% would be needed to support service improvements. Before the announcement, NHS Confederation Chief Executive, Niall Dickson had said that anything less than 4% would result in ‘managed decline’ in the NHS.

A report by the Institute for Fiscal Studies and the Health Foundation published on 24th May found that UK spending on health as a proportion of GDP is lower than in similar EU economies, and will need to increase if quality of care is to be maintained. The report found that UK spending, at 9.5% of national income, was just below the EU15 average of 10.2% when weighting spending by GDP for each country. In order to simply maintain current levels of service, an average annual growth in health spending of 3.3 per cent would be required for the next 15 years, whilst a slightly larger increase of 4% would be needed to address immediate funding requirements.

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Published 19. June 2018 in News, News UK