The Chancellor Rachel Reeves has announced a £29 billion real terms funding boost for the NHS from 2023-24 to 2028-29 (£53 billion cash increase). The increase in annual NHS day-to-day spending is equivalent to a 3% average annual real terms growth rate over the Spending Review (SR) period. It includes up to £10 billion towards technology and digital transformation.
The SR has also confirmed a £2.3 billion real terms increase (£4 billion cash increase) in the Department of Health and Social Care’s annual capital budgets to be invested in new technology, hospitals and primary care. The government says this is the largest ever health capital budget, representing a more than 20% real terms increase by the end of the SR period.
Commenting on the Chancellor’s announcements, Matthew Taylor, Chief Executive of the NHS Confederation, described this as a “flat settlement” that he said left “a major shortfall in capital funding.”
He also argued that the government needs to lift the ban on private capital investment in to the NHS. “This is required to boost NHS capital funding,” he says. “This needs to be addressed in the upcoming national infrastructure strategy and ten-year plan. Only then will the NHS be able to work with the private sector to build new healthcare facilities, including much mooted neighbourhood health hubs, while also supporting economic growth and local regeneration.”
Delivering its health mandate
Having been elected with a mandate to get the NHS back on its feet and to reduce hospital waiting lists, the government believes its spending plans will move the system past recovery and deliver an NHS that is fit for the future. Through the SR and the upcoming 10 Year Health Plan, it hopes to achieve the three big shifts to move the system from analogue to digital, treatment to prevention, and hospital to community.
The investment will be accompanied by reform to deliver better care and ensure the NHS is financially sustainable, with taxpayers’ money well-spent.
Whilst the challenges facing the adult social care system have been recognised in the Policy Paper, progress on transforming this sector loom still in the distance. The first phase of the independent commission to build a consensus on reform of adult social care, led by Baroness Louise Casey, will report in 2026 and will focus on how to make the most of existing resources to improve the system. The SR allows for an increase of over £4 billion of funding available for adult social care in 2028-29, compared to 2025-26.
