The NHS will implement an inflationary 4% budget increase next year, but health chiefs have said they may not allow waiting lists to be cut by a further 18 months, the Guardian has learned.
Healthcare is on course to be one of the big winners in the spending review on October 30, if the Treasury gets a proposed 4% increase in real terms. This could translate into a cash injection of around £7 billion for England’s health budget, while other departments face much tougher regulations and some are likely to have to cut capital spending this year.
Nevertheless, NHS chiefs are privately raising the alarm about the plans, saying it may not be enough to deliver on Labour’s key promise to tackle the huge backlog in care and add millions of extra appointments. One Whitehall source said it would only allow them to “stand still” on waiting lists, rather than making progress in reducing them.
The insider said there was a landing zone of a 4% real increase, but this was expected to be eaten up significantly by NHS staff pay rises. NHS bosses in England also believe the service will receive a 4% real increase in funding for the 2025-2026 period – double the rate of inflation.
A Department of Health and Social Care source said pay discussions were still ongoing and no figure had yet been decided. They declined to comment on the spending statement.
A multibillion-pound increase for the NHS is likely to be welcomed by the government as a major step in paving the way for the service’s recovery after fourteen years under the Conservatives. At the most recent budget settlement under the last government, the NHS saw a real increase of just 0.2%.
But a senior NHS official said: “The danger is that the Chancellor is presenting this as a ‘Budget for the NHS’ when in reality it doesn’t really come close (to) giving the service the money it needs ). The 2% that remains after the wage agreements have been taken into account will not be enough.”
They added that NHS chiefs would not be publicly “rude about it as 4% is more than anyone expected and because of the wider state of the public finances”.
The Treasury has been trying to fill a black hole in the public finances left by the Conservatives and must also find tax increases that will raise more money, while delivering on Rachel Reeves’ pledge at the party conference that there will be no return to austerity take place.
The government has also had to find money to deal with industrial action, such as the trainee doctors’ strike, for which the Conservatives had not allocated sufficient budget. Ministers hope that ending the strikes will help return the NHS to normal and reduce the backlog in treatment and care.
But Whitehall insiders said it was now clear this was not enough to make significant progress in clearing waiting lists.
A DHSC source said they had never assumed that ending industrial action would be enough. “Partly it’s about more money, but we do think change is possible that involves significant reform around elective activities, changing the way we conduct our activities and doing things more productively,” they said.
Think tanks such as the Health Foundation have made it clear to ministers that if the NHS were to receive anything less than the 3.8% annual funding increases it has historically had, there is a risk that Labour’s ambitions for the service will remain unaffordable. The Institute for Fiscal Studies had forecast a real increase of 3.6%, which they said would be enough to deliver the NHS workforce plan, but perhaps not enough to cover all the other promised improvements to the health service.
One health policy expert said: “A real increase of 4% is better than (the NHS budget rising in) the recent past. But it is at best a matter of perseverance when it comes to delivering on the manifesto promise (of 2 million additional appointments per year).”
Once Reeves has confirmed exactly how much the NHS will receive next year, Wes Streeting, the Health Secretary, will publish a detailed new plan setting out how hospitals will deliver the promised 40,000 extra appointments per week. Ministers are aware that polls show that tackling long waiting times for care and getting the NHS running smoothly again is the public’s top priority.
Reeves is also expected to use her budget to give health care trusts more capital to spend on repairing the agency’s increasingly worn infrastructure and buying new equipment such as scanners. The NHS Confederation, which represents trusts, says an extra boost is needed £6.4 billion per year to this end in each of the following three years. NHS sources say discussions with the Treasury over more capital have been positive and ministers ‘understand’ the service’s need for extra money given the increasing disruption to patient care from roofs at risk of collapsing, equipment that breaks down, floods and fires. .
Nevertheless, Reeves appears to be resisting calls to also give the NHS an emergency cash injection for the current budget year, of £1 billion to £1.5 billion – a “bailout within a year” – to help tackle the backlog and reduce the risk of to shrink Labour. faced an ‘NHS winter crisis’ during the country’s first months in power.
Matthew Taylor, the chief executive of the NHS Confederation, used an interview in the Health Service Journal this week to argue for extra funding to help hospitals cope with the huge extra demand brought on by the cold months. He told ministers that voters would not understand if extra money was given to private hospitals so they could treat more NHS patients while awaiting planned care, rather than helping the service itself deal with what was It is expected to be a tough winter.
“The problem with (that prospect) is that if you have a crisis in emergency medicine and urgent care, and you haven’t taken advantage of the opportunity to put some more money in to help that crisis, that’s a big decision would be,” said Taylor, who was a key adviser to Tony Blair in No 10 in the 2000s. That would be a “big political choice” for ministers, he added.
A senior figure from one of the NHS’s largest trusts said this week that hospitals were “expecting an incredibly difficult winter”, the HSJ reported. There are widespread fears that a “triplemic” of flu, Covid and RSV could overwhelm hospitals, which are already under immense pressure.