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NHS funding: Is £10bn rise really a cut?


When it comes to the NHS budget, all sorts of figures get thrown around. You only need to have seen Prime Minister’s Questions on Wednesday or followed the various coverage about health spending since the weekend to see that.

Ministers like to make big play of the fact they’ve increased the budget by £10bn in England. Or is it £8bn (as NHS England boss Simon Stevens said this week), or £4.5bn (as MPs grilling Health Secretary Jeremy Hunt claimed)?

All are right. In fact you could easily argue the budget has been cut. Let me explain why.

Firstly, the £10bn figure refers to the increase – in real terms once inflation has been taken into account – that will be seen from 2014-15 to 2020-21. But £2bn of that was announced in the last Parliament so most commentators prefer to use the £8bn figure – or £8.4bn to be exact.

Cuts elsewhere

The problem with that is it covers just the money given to NHS England. That accounts for the majority of the budget but not all of it.

Last year NHS England received £101bn of the overall £118bn health pot. This is what ministers like to describe as the front line budget.

And it’s certainly true it covers many of the core services from hospitals and mental health care to GPs.

But the remaining £17bn also includes money that benefits the front line. For example, it covers the capital budget used to make sure the buildings patients are treated in are kept up to scratch, money for public health to pay for services such as stop smoking help and weight management programmes and the funds used to train doctors and nurses.

To help fund the £8bn increase in the NHS England budget in the coming years, ministers are cutting back on these funds.

The House of Commons’ Health Committee did some number-crunching on this earlier this year and came to the conclusion the health budget was only rising by £4.5bn during this Parliament – hence the tough questioning the health secretary was given on Tuesday.

Chart showing spending rise from 2014/15-2021/22

But even that figure can be pulled apart. Inflation in the health service runs at a higher level than the economy in general because of factors like the cost of new drugs and treatments.

It means, according to the Nuffield Trust, the “true” rise is something like £800m. And remember this is all based on predictions about inflation that were made before the vote on Brexit – there are already signs prices are rising at a faster rate than forecast. That £800m rise could easily drop.

But you don’t even need to rely on that happening to argue the budget has been cut. The fact that last year NHS trusts – the bodies that run hospitals, mental health units and ambulances - finished the year a record £2.45bn in deficit means the health service is not starting from zero.

It’s the equivalent of the starting blocks in a race being moved behind the starting line.

All this may sound a little technical. But it helps to explain why – when it comes to the NHS budget – it’s never black or white.


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