Medical experts have warned the boost to NHS funding in England unveiled in the budget will not be enough to rebuild the country’s ailing health service and that it will take time for patients to see improvements
Rachel Reeves last week announced an additional £22.6bn over this year and next for the NHS, which she claimed was the biggest spending increase for the health service – outside the Covid pandemic – since 2010.
However, analysis by the King’s Fund suggests that much of this money will be absorbed by the NHS’s ambitious pre-existing recruitment plans, which will see more nurses and doctors on the payroll.
The health thinktank’s warning comes as the prime minister signalled to the financial markets that the government will focus on reform rather than further tax hikes to improve public services.
Siva Anandaciva, chief analyst at the King’s Fund, said: “The investment will bring some benefits, from extra appointments to upgrades to a small number of outdated NHS facilities, but the measures in this budget alone won’t fully deliver the much-needed reforms to health and care services the government has said it wants to deliver.”
The NHS budget is due to grow by 3.8% annually under Labour’s spending plans, but an expanding NHS workforce already requires yearly budget increases of 3.6%.
The NHS long-term workforce plan, which was published last year by the previous government, seeks to avert an expected shortfall of hundreds of thousands of staff. Day-to-day spending will also be squeezed by pay deals and rising NHS financial deficits.
Reeves told the Commons in her budget speech last week that the NHS was the country’s “most cherished public service of all”. She emphasised that “change must be felt” by the public, including an “NHS that is there when you need it.”
More than £3bn of the new funding announced in the budget has been set aside to mend crumbling wards. But the King’s Fund said this would only cover a small part of the maintenance bill for the nation’s hospitals and warned that it would take time for patients to feel the difference.
“After a decade of underinvestment in NHS buildings and equipment by previous governments, the cost of the NHS maintenance backlog stands at a whopping £13.8bn and far too many buildings and equipment are simply knackered or outdated,” said Anandaciva.
The King’s Fund also discovered in budget papers that the government has already taken nearly £1bn from health capital funding this year to meet day-to-day pressures. The move, finalised since the general election, comes despite criticism by the health secretary, Wes Streeting, of capital-to-revenue transfers.
“The result of prolonged underinvestment in capital budgets is crumbling buildings, flooded theatres, outdated equipment, a decrease in productivity and an immeasurable impact on staff and patient care,” said Anandaciva.
He added: “I hope the new government break with this unsustainable tradition and this will be the last time we see capital investments in the future of the NHS raided.”
Writing in the Financial Times this weekend, Keir Starmer attempted to reassure the financial markets by saying Labour will focus on reforming public services and economic stability, rather than additional funding increases.
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“Just as we cannot tax and spend our way to prosperity, nor can we simply spend our way to better public services,” the prime minister wrote. He added: “That is why reform is an essential pillar of this government’s agenda.”
The markets initially pushed up the cost of government borrowing after Reeves’s tax-raising budget last week.
The Institute for Fiscal Studies has said Reeves may need to raise a further £9bn to avoid a fresh round of austerity for some struggling public services.
But a Starmer ally reportedly briefed the Financial Times that the “spending envelope is set” and departments would “have to reform to improve services”.
The Nuffield Trust said last week that the future of the NHS was uncertain. “The funding promised [in the budget] will meet the health service’s immediate day-to-day needs, but will not stretch far towards the government’s ambitions to rebuild an ailing NHS,” said Becks Fisher, the trust’s director of research and policy.
Fisher added that non-NHS health spending was also inadequate, as councils do not have enough money to keep pace with demands for social care: “Increases in local authority budgets are welcome, but they face hugely difficult decisions on where to spend to meet myriad local needs. The £600m social care grant announced for next year will be insufficient to enable councils to keep pace with demand.”