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Analysis

Health care funding
The latest funding figures for England

Published 20 March 2023
Last updated 5 March 2026
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Latest funding figures for England

We analyse the latest health care funding figures for England, looking at how current funding compares with historical levels and how it stacks up against what is needed to meet future pressures. 

This page was originally published on 20 March 2023 and is updated at every fiscal event. This analysis is based on the March 2026 Economic and Fiscal outlook publication from the Office for Budget Responsibility and Treasury figures on spending plans from the November 2025 budget and the March 2026 spring statement.

All growth rates are presented in real terms (2025/26 prices) after adjusting for changes in pensions policy and inter-departmental transfers (see note). As this is the first fiscal event in recent years with no specific funding figures published for NHS England, our analysis primarily focuses on the Department of Health and Social Care budget. For section 3, we have retained a focus on NHS England funding due to availability of data.

Key points

This page was last updated in March 2026, using the latest available data.

  • Between 2025/26 and 2028/29, planned Department of Health and Social Care (DHSC) total spending will grow from £217.0bn in cash terms to £246.0bn. Adjusted for pensions and transfers, this works out to be a real-terms increase of 2.7% per year.
  • Planned day-to-day DHSC spending will increase from £203.4bn in cash terms in 2025/26 to £231.2bn in 2028/29. This is a real-terms increase of 2.8% per year.
  • Over the same period, the DHSC capital budget will increase from £13.6bn in cash terms to £14.8bn, a real-terms increase of 1.0% per year.
  • Adjusted for the changing size and age profile of the population, the NHS budget is projected to grow at a rate of 1.9% per head per year.
 

How much funding has been committed to health care?

The Department of Health and Social Care’s (DHSC’s) total budget, which consists of revenue and capital components, sets the limit on overall health funding in England. A large proportion of DHSC revenue funding (historically around 90%) goes to NHS England to pay for the day-to-day running costs of the NHS, including for staff pay and medicines. The remaining DHSC revenue funding covers a range of programmes, including health care staff education and training and local government public health services. Capital funding is used to finance long-term investments, such as buildings and medical equipment.

The 2025 Budget set out the planned health care spend for the entire parliamentary period, and this has been updated for the March 2026 Spring Statement.

Table 1 and Figure 1 show the spend for DHSC by funding type (revenue, capital and total) from 2025/26 to 2028/29 in nominal figures (cash) and real figures (adjusted for inflation).

Table 1: Health spend by funding type, by year for England

 

Nominal figures (£bn)

Real-terms funding after adjusting for pensions and transfers (£bn)*

Real-terms annual growth rate**

 

2025/26

26/27

27/28

28/29

2025/26

26/27

27/28

28/29

2025/26 to 2028/29

DHSC revenue

203.4

211.4

221.3

231.2

197.4

203.0

208.9

214.3

2.8%

DHSC capital

13.6

14.0

13.8

14.8

13.6

13.8

13.3

14.0

1.0%

DHSC total

217.0

225.4

235.1

246.0

211.0

216.8

222.2

228.2

2.7%

 * See Note box
** Calculated as the compound annual growth rate 
The sum of DHSC revenue and capital might not exactly equal DHSC total due to rounding.

Figure 1

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We present spending figures in cash terms and real terms, using our own calculations to account for inflation. We use the GDP deflator as the standard measure of inflation. This is the deflator used by the Treasury to calculate buying power across all public services. 

We also remove changes to pensions policy when we present our total budget and revenue budget, so our measures are comparable over the long term. These policy changes reflect an increase in the employer contribution rate to 6.3% from April 2019 (costing an estimated £2.85bn) and a further 3.1% (£1.97bn) rise from April 2024. This was separately reflected in the financial directions to NHS England in March 2024 and represents a one-off adjustment to staff pensions. This should be treated more like an accounting adjustment rather than a meaningful addition to total health spend. We choose not to include these costs to avoid distorting comparisons of health spend over time.

We further remove £1.43bn per year that has been allocated to the NHS by the government to cover the increase in employer National Insurance Contributions (NICs) announced during the last budget. As with the pensions, the additional funding given due to the increase in employer NICs does not reflect an increase in the NHS’s purchasing power. Removing it would enable a more coherent comparison over time. Further, an additional £0.4bn earmarked for redundancy costs was removed in 2025/26 and 2026/27.

From 2025/26 onwards, the Treasury estimates that an additional £1.61bn will be allocated to the NHS annually as a result of inter-departmental transfers. This is not yet reflected in the Treasury’s cash figures for future years, but we add them to the 2025/26 to 2028/29 fiscal years when presenting our real-terms figures and growth rates to provide a more complete picture of the funding available to the NHS. A £1.0bn tranche was transferred in 2025/26 and was therefore excluded when making the calculations.

It is difficult to estimate the future level of these transfers, as a substantial portion will come from the Immigration Health Surcharge, revenue from which is expected to reduce substantially as new immigration restrictions come into force over this parliament.

Additionally, these numbers are sensitive to changes in the long-term inflationary forecast. Any unexpected increase in inflation will degrade the NHS’s purchasing power and limit the pot of cash available to fund day-to-day health services. 

 

How does funding compare with historical levels?

Figure 2 shows the real-terms growth rates in total health funding over the past 40 years under different governments. The planned increase in funding between 2025/26 and 2028/29 (2.7%) is below the pre-COVID-19 long-term average (3.8%). However, it is higher than the funding growth observed in the 5 years preceding the pandemic (1.6% per year).

 

How is growth in NHS funding impacted by demographic pressures?

Using the NHS day-to-day funding settlement from the Spending Review, Figure 3 illustrates the impact of adjusting for inflation and changes to the population size and age profile on the NHS England spending growth rate per year. Using the founding of NHS England in 2013/14 as a baseline, the real-terms growth rate in spending has been 3.2% per year.

The population of England is increasing, with a growing share of people aged 65 years and older. Health care use typically increases with age. After accounting for both population growth and ageing, planned NHS spend per head will grow by 1.9% per year in real terms between 2013/14 to 2028/29.

Figure 3

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Looking ahead

The 2025 Spending Review allocated health and care funding for the bulk of the parliamentary period. The 2025 Budget built on that and further updated the government’s spending plans. The latest 2026 Spring Statement did not result in any changes to the planned DHSC budget. 

During this second phase of the Spending Review period (2025/26 to 2028/29), total health funding is projected to grow in real terms, at 2.7%. This is lower than both the 3.8% pre-COVID-19 long-term average growth and the 3.3% growth during the first phase of the Spending Review (2023/24 to 2025/26). 

As we have previously reported, the NHS's funding picture remains precarious. Without significant increases in productivity, the recent funding uplifts are likely only enough to keep up with existing cost pressures.

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