The budget will revive a “broken but not beaten” NHS, Labour ministers have said, with billions of pounds of funding to be announced in an effort to cut record waiting lists.
The chancellor, Rachel Reeves, said measures to be announced on Wednesday would “end the neglect” of the health service, delivering more surgical hubs and radiotherapy machines in a drive to lay on an extra 40,000 appointments a week.
The government is expected to deliver a boost of at least 4% to NHS annual funding, sources have previously told the Guardian, which could translate to a cash injection of about £7bn for the health budget in England.
In a speech on Monday to underline how steep tax rises would fund public spending, Keir Starmer said this would be the biggest budget of the next five years, with the toughest decisions, to set the course for the whole parliament.
The prime minister said he wanted to “take the difficult decisions here and now upfront” to create the conditions for improving public services, investment and growth.
“We are fixing the foundations in this budget … That’s the approach … you can expect to see pretty well all of that in this budget,” he said, though he added that he could not “ever completely rule out any further changes”.
Treasury sources said Starmer and Reeves would emphasise this week that the budget would be “generational” and would contain the most significant decisions of the parliament, barring unexpected crises.
“We do not want to come back and do another budget of this magnitude,” one said. “This is responding to a once-in-a-generation set of crises and we don’t intend to ask the country to do this again.”
Tax rises are expected to hit employers’ national insurance contributions, a rise that will directly be linked with the investment planned for the NHS. The rises are not likely to be extended to employers’ pensions contributions.
The chancellor is also expected to make changes to capital gains and inheritance tax and to extend the freeze on tax thresholds, meaning more households will be dragged into paying higher rates of tax as wages rise.
It comes as Reeves unveils a £240m package to speed up the rollout of local services to help people back into work. The “Get Britain Working” scheme is expected to feature support in work, skills and health for people who are disable or long-term sick.
Treasury sources said there would be “no rabbits” – big surprise measures – claiming they were instead focused on the serious endeavour of fixing the national finances.
Speaking on a visit to St George’s hospital in south London on Monday, Reeves and Wes Streeting, the health secretary, said hard choices would deliver extra public spending where it was necessary.
Starmer also underlined that point in his speech, drawing a distinction with the elections of 1997 and 2010 when Labour leaders promised to match Conservative spending plans.
The prime minister said he had never made the same commitment because he was not prepared to countenance significant spending cuts – though cabinet ministers have privately raised alarm at the prospect of squeezed budgets.
“The budget the chancellor will deliver on Wednesday will prevent devastating austerity in our public services and prevent a disastrous path for our public finances,” Starmer said. “That is the reality of what would happen if we’d stuck to Tory spending plans.”
He admitted the £2 bus fare cap, which was introduced under the Conservatives to kickstart public transport use after the Covid pandemic, would end. The cap will rise to £3 after the current funding runs out at the end of the year. The decision comes despite heavy lobbying by Labour’s elected mayors to keep the cap in place, as reported last week by the Guardian.
The prime minister also gave a hint that the chancellor could freeze fuel duty once more in this week’s budget, telling a reporter from the Sun, which has campaigned to keep the freeze in place: “I do understand how important it is to you, your readers and others.”
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During their hospital visit, Reeves and Streeting said the NHS could not wait for future budgets in order to start making drastic improvements.
Streeting, who has been criticised for describing the NHS as broken, said it was “broken but it’s not beaten” and the budget marked a moment to rebuild, including a focus on elective treatment.
In August more than 7.6 million patients in England were waiting for an appointment, scan or operation, and more than 280,000 had been waited for more than a year.
The government announced on Monday that the budget would fund £1.5bn for more surgical hubs and scanners and £70m for new radiotherapy machines, which Reeves said would free up thousands of additional procedures and millions of diagnostic tests in England.
Matthew Taylor, the head of the NHS Confederation, said the announcement was a “step in the right direction” especially ahead of a “difficult” winter. He said: “We know that capital investment is critical to increasing productivity and ensuring patients are provided with the best possible care in a timely way.”
The Kings Fund said capital investment would “only go so far in improving patient care when the existing backlog of NHS maintenance issues with buildings and equipment continues to rapidly rise and now stands at a staggering £13.8bn.”
Figures seen by the Guardian show that the NHS would need to spend more than £240m just to replace out-of-date radiotherapy machines. According to Radiotherapy UK, an estimated 70 machines are expected to be out of date by the end of 2024. It would cost about £3.5m to replace each machine.
Prof Pat Price, the chair of Radiotherapy UK, said: “While £70m is a very welcome first significant investment in new radiotherapy machines since 2016, if the government is serious about cutting cancer treatment waiting lists, there’s a lot more that needs to be done.
“Investing £350m in radiotherapy by replacing out-of-date machines alongside new technologies could free up 87,000 cancer appointments and super-boost the capacity of our cancer workforce.”
Mark Lawler, a professor of digital health at Queen’s University Belfast and the chair of the International Benchmarking Partnership, said that combined with £400m funding for cancer surgery and £100m for chemotherapy, the government would need to spend £850m on cancer treatment to make substantial inroads into cancer waiting lists, enabling more patients to be treated quicker.
“Incredibly, we have not achieved the 62-day target for referral to first treatment since 2015, a shocking indictment of a system that is failing our cancer patients,” he said. “Prompt treatment is crucial to the chances of survival. An investment of just £850m – a tiny fraction of the overall NHS budget – would make significant inroads into the cancer treatment waiting lists, saving thousands of lives.”