Autumn statement - what it means for NHS finances

About 2 mins to read

Press release

Today George Osborne MP, the Chancellor of the Exchequer, set out the government’s Autumn Statement.

Anita Charlesworth, Chief Economist at independent health care charity the Health Foundation, commented:

'Halfway through this financial year, the net deficit across England's hospital sector is more than £700 million and 80% of acute hospitals are running at a loss. Pressures on our hospitals are not just financial - they are struggling to meet key targets for A&E, cancer and surgery. This is the stark backdrop to George Osborne's announcement of extra cash for the NHS.

'Today's Autumn Statement confirms that the NHS is the big pre-election public spending winner. What is now clear is the extent to which the announcement, made first at the weekend, is more than what was already planned. The government is adding £1.25bn to the Department of Health's budget for next year. Health spending in 2015-16 is now planned to be £116bn in cash terms, that is £3.3bn more that the budget this year. It amounts to a 1.5% increase in real terms. £1bn of this extra money comes from the Treasury Reserves, while the remaining £0.25bn is from the Foreign Exchange Fines (FOREX). This is a welcome increase to avoid a full blown funding crisis.

'Despite this additional funding, the NHS is far from out of the woods. The current government plans spending cuts of more than £30bn by 2018 to meet its targets to eliminate the deficit. In May 2015, the incoming government will need to reconcile this with the NHS funding requirement of at least £8bn at the end of the decade.'

Real-terms changes in English NHS spending 2010/11-2014/15

This chart shows the real-terms change in NHS spending each year between 2010/11, and 2013/14, and the planned increase for 2014/15. The figure for 2015/16 shows that the planned increase has risen from the original plan of 0.4% to an increase of 1.5% following the additional £1.25bn announced in the autumn statement.

The average annual increase from 2009/10 to 2015/16 will now be 0.9% a year in real-terms, higher than the previously expected 0.7% a year.