Health Foundation response to announcement on new NHS money

Responding to the Treasury’s supplementary estimates (2015/16) provided to Parliament, Anita Charlesworth, Director of Research and Economics, said:  

'Ballooning NHS deficits are now too big to be managed within the government envelope for health, the Treasury has confirmed today. Just two months after the spending review, the Chancellor has had to dig into his pockets for more NHS funding for the second year running. This year’s health budget will be increased by £205m to prevent the Department of Health overspending, partly because of a lower than expected rebate from the drugs industry. In addition, funding earmarked for new capital investment will be cut by almost £1bn and used to meet day-to-day running costs.  

'This is an indication of the dire state of NHS finances halfway through its decade of austerity. The capital transfer will help the NHS avoid an immediate crisis but will not solve its financial woes. The NHS urgently needs practical support to help it deliver productivity gains. But there must now be serious doubts about whether it can realise the £22bn of savings required by 2020/21 while also maintaining the quality and range of services on offer.'

Notes to editors:

The Treasury’s supplementary estimates can be found here. It shows that:

• The Department of Health will make a capital to resource transfer of £945.3m
• Net cash increase for DH is £252.3m, which includes £43m due to transfers between other government departments and £3m is earmarked for women's charities, leaving £205m of additional funding for the Department of Health.
• This means the Department of Health’s total budget for 2015/16 increases from £98.7bn to £98.9bn.
• The Department of Health announced that the £205m will fund central pressures mainly as a result of the Pharmaceutical Price Regulation Scheme (PPRS) payment for 2015/16 being £640m rather than the £796m expected when the budget was set, leaving the Department £156m short.

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