NHS funding in England ‘will decrease’ in next financial year, think tank warns

By Ella Pickover, Reporter19th March 2024News EnglandBusiness / Funding / Finance, Government / Politics, Hospitals, News England, NHS

The funding pot for the NHS in England is set to “decrease” in the next financial year, leading health commentators have warned.

The Health Foundation said the budget for the health service – £164 billion – remains “flat”, but when changes to the population and inflation are taken into account it will be 1% lower in 2024/25 compared with the previous year.

New analysis by the think tank also suggests the overall Department of Health and Social Care budget – £192 billion for 2024/25 – equates to an increase of 0.6% in real terms compared with 2023/24 and a real-terms reduction in funding compared with 2022/23.

The analysis also suggests that other spending by the Department, including money for healthcare staff education and training and the public health grant, is due to face a 4.7% real-terms funding cut in 2024/25 compared with 2023/24.

But capital funding is due to increase by 13.6%.

Earlier this month, Chancellor Jeremy Hunt announced a £3.4 billion investment in NHS productivity in his Budget through expanding the use of AI, reducing paperwork for medics, and improving access to patients.

He also announced an extra £2.45 billion for day-to-day NHS spending, which will cover areas such as wages.

Hannah-Rose Douglas, deputy director for the Health Foundation’s Real (Research and Economic Analysis for the Long term) Centre, said: “While the additional funding for the NHS in the recent spring Budget is welcome, when the impact of a growing and ageing population as well as inflation is taken into account, the value of the NHS England’s spending pot will decrease in value by 1% in 2024/25, compared to the previous year.

“This underlines the challenges for the NHS to improve care when faced with these ongoing funding and demand pressures.

“The Government’s plans to increase capital spending to boost NHS technology is a welcome and significant investment, although it won’t kick in until 2025/26, after the general election.

“There is a long history of promises to spend more on NHS capital and technology, with budgets too often raided to pay for short-term pressures, so it’s essential that this money is spent as intended.”

Commenting on the analysis, Patricia Marquis, director for England at the Royal College of Nursing, said: “NHS budgets must take account of our ageing population and increasing demand. Failing to do so means stealth cuts for the NHS, which could have profound consequences for patient care.

“At a time when there are chronic staff shortages, applications to nursing courses are collapsing, and long waits for treatment have become normalised, this choice to under-invest in the NHS cannot be justified.

“This latest analysis comes as reports say local NHS trusts are under pressure to cut staffing numbers to make this year’s budget add up. Cutting NHS budgets, especially on education and training, will push more nursing staff out of the health service and have an impact on the quality of care.

“The NHS is in crisis and deserves better than a Government sitting on its hands. The Health Secretary must urgently address why nursing staff should accept being asked to do more with less yet again.”

A Department of Health and Social Care spokesperson said: “We are committed to supporting the NHS and building a healthcare system that is faster, simpler and fairer. That’s why we are providing the NHS with record funding of nearly £165 billion a year by the end of this Parliament, an increase of 13% in real terms compared to 2019-20.

“We announced in the Budget that the NHS will receive a further £3.4 billion to help improve productivity, by boosting investment in the latest technology and upgrading IT systems, allowing doctors and nurses to focus on patients rather than admin, which will help bring £35 billion in savings.

“We have also set out the first-ever long-term plan for the NHS workforce, backed by more than £2.4 billion, to ensure that the health service can train, recruit and retain the staff it will need in the years to come.”