New analysis shows NHS budget squeezed by inflation and population growth

Today (Tuesday) the Health Foundation’s REAL Centre has published analysis showing the value of government health spending, following the Chancellor’s spring Budget (March 6th, 2024). 

The analysis looks at the value of different parts of the Department of Health and Social Care (DHSC) budget andtakes into account the impact of inflation (real terms) and changes in the population. It shows that: 

• DHSC’s total budget will increase to £192bn in 2024/25 but inflation means that, on current plans, this would equate to a small increase of 0.6% in real terms compared with 2023/24 and a real terms reduction in funding compared with 2022/23   
• NHS England’s budget of £164bn is essentially flat in real terms compared with the previous year. However, when adjusted for a growing and ageing population, NHS England’s budget is due to be 1% lower in 2024/25 compared with the previous year  
• Other DHSC spending, including for health care staff education and training and the public health grant, is due to experience a 4.7% real terms funding decrease in 2024/25 compared to the previous year 
• Capital funding is due to increase by 13.6% in real terms in 2024/25 compared to the previous year. 

Hannah-Rose Douglas, deputy director for the Health Foundation’s REAL 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.’