Department of Health has its funding increased mid-year: the Health Foundation's reaction

Three weeks ago, in the Autumn Statement, the Chancellor of the Exchequer announced an additional £1.25 billion for the health service in England for the 2015-16 financial year. Now data published by the Department of Health (DH) shows that funding problems in the NHS mean that the Treasury has also had to find additional money to enable the Department to make it through the current financial year.

The Department of Health’s Mid-year report 2014-15 shows that:

• The Treasury has increased the DH budget by £250 million, ie provided the Department of Health with additional money mid-year.
• In addition DH is cutting its planned capital spend and using £490 million of that budget to provide extra running cost funding for the NHS in this financial year.
• Half way through the financial year, 60% of all NHS providers (mental health, community, ambulance trusts and hospitals) were in deficit.
• The significant challenges are concentrated in the acute hospital sector where 80% of NHS acute hospitals were in deficit.
• The majority of the new money for 2014-15 is being used to provide additional funding to NHS hospitals to reduce their deficits. Following this additional injection of funding, the Department of Health now reports that the proportion of NHS providers in deficit will fall to 40% (from 60%).

Anita Charlesworth, Chief Economist at the Health Foundation, comments:

'NHS finances are under increasing strain and it has been clear for some time that the NHS would need additional funding next year to cope with increased pressures. The scale of the financial challenges facing the NHS is huge. Without this year’s extra money most hospitals in England would not be able to balance their budget. The Department of Health is now having to commit almost three quarters of a billion pounds extra to meet NHS running costs for this financial year. This is in addition to the extra £1.25 billion for 2015-16 announced by the Chancellor just 3 weeks ago.

'The NHS is struggling to meet extra demand. To meet that challenge, spending on temporary staff is accelerating and hospitals are running out of saving schemes. It is difficult to imagine how the financial situation can be turned around quickly and NHS finances will continue to be precarious.'

Notes to editors

More information about the additional funding can be found on the Department of Health website.

Media contact

Mike Findlay, Media Manager
T: 020 7257 8047
E: mike.findlay@health.org.uk