In a much-anticipated move, the NHS is poised to receive a 4% real-terms budget increase in the coming year, according to inside sources. This inflation-busting uplift, which could translate to a cash injection of around £7 billion for England’s health budget, is expected to be one of the highlights of the upcoming spending review on October 30th. While other government departments brace for tighter settlements and potential cuts to capital spending, the NHS appears to be emerging as a clear winner.
The substantial funding boost is likely to be touted by the government as a significant step towards repairing the NHS after a challenging 14 years under Conservative leadership. In stark contrast to the meager 0.2% real-terms rise the health service received in the most recent budget settlement under the previous government, the proposed 4% increase signals a shift in priorities and a recognition of the urgent need to address the NHS’s mounting pressures.
Health Chiefs Express Reservations
Despite the seemingly generous funding increase, NHS chiefs are privately raising concerns about whether it will be sufficient to deliver on Labour’s key pledges, particularly in terms of cutting the massive care backlog and providing millions of additional appointments. One Whitehall insider suggested that the extra money would merely allow the NHS to “stand still” in terms of waiting lists, rather than make meaningful progress in reducing them.
The source revealed that while a 4% real-terms increase was the likely landing zone, a significant portion of this would be consumed by NHS staff pay rises. This leaves health bosses in England skeptical about their ability to make substantial inroads in clearing waiting lists, even with an expected 4% real-terms funding increase for 2025-26 – which is double the rate of inflation.
“The danger is that the chancellor presents this as a ‘budget for the NHS’ when in reality it’s not really going to come close [to giving the service the money it needs]. The 2% that’s left after the pay deals are taken into account won’t be enough.”
– Senior NHS official
The official added that while NHS chiefs were unlikely to publicly “be churlish” about the funding boost, given that it exceeds expectations and acknowledges the wider state of public finances, there are lingering doubts about its adequacy in the face of the service’s deep-rooted challenges.
Balancing the Books and Delivering on Promises
The Treasury finds itself grappling with a delicate balancing act as it seeks to plug the fiscal hole left by the Conservatives while also fulfilling Rachel Reeves’s commitment to avoiding a return to austerity. This has necessitated a search for tax rises that can generate additional revenue, even as the government strives to make good on its promises to the electorate.
Resolving industrial disputes, such as the junior doctors’ strike, has also placed an additional burden on the Treasury, as the Conservatives failed to allocate sufficient funds to address these issues. While the government hopes that ending the strikes will help normalize the NHS and initiate a reduction in the treatment and care backlog, Whitehall insiders now concede that this alone will not be enough to make significant progress.
The Road to Recovery: Funding and Reform
Health policy experts have cautioned that providing the NHS with anything less than its historical average of 3.8% annual funding increases risks undermining Labour’s ambitions for the service. The Institute for Fiscal Studies projected that a 3.6% real-terms increase would enable the implementation of the NHS workforce plan but might fall short of covering all the promised enhancements to the health system.
“A 4% real-terms increase is better than [NHS budget rises in] the recent past. But it’s at best touch-and-go in terms of delivering the manifesto commitment [of 2m more appointments a year].”
– Health policy expert
Once the exact funding allocation for the NHS is confirmed, Wes Streeting, the health secretary, is expected to unveil a comprehensive plan detailing how hospitals will deliver the promised 40,000 additional weekly appointments. Ministers are acutely aware that tackling lengthy care wait times and restoring the NHS to full functionality ranks as the public’s top priority, as evidenced by polling data.
In addition to the budget increase, Reeves is anticipated to provide health trusts with increased capital funding to address the NHS’s increasingly dilapidated infrastructure and procure new equipment, such as scanners. The NHS Confederation estimates that an extra £6.4 billion per year is needed for this purpose over the next three years. NHS sources indicate that discussions with the Treasury regarding enhanced capital have been constructive, with ministers recognizing the service’s need for additional funds to mitigate the growing disruption to patient care caused by deteriorating facilities and equipment failures.
The Specter of Winter Pressures
Despite the positive developments, Reeves appears to be resisting calls to provide the NHS with an emergency cash injection of £1 billion to £1.5 billion for the current financial year. This “in-year bailout” is seen by some as crucial to help hospitals cope with the immense extra demand that the winter months invariably bring. Matthew Taylor, chief executive of the NHS Confederation, has publicly appealed for additional funding, cautioning that voters would struggle to understand if extra resources were directed to private hospitals to treat more NHS patients awaiting planned care, rather than being used to support the service itself during a challenging winter period.
“The problem with [that prospect] is if you have a crisis in urgent and emergency care, and you haven’t used the opportunity to put a bit more money in to help that crisis, then that would be a big call. That would be a big political choice for ministers.”
– Matthew Taylor, NHS Confederation Chief Executive
Hospitals across the country are bracing for an “incredibly difficult winter,” according to a senior figure from one of the NHS’s largest trusts. There are widespread concerns about a potential “tripledemic” of flu, Covid, and RSV overwhelming hospitals that are already under immense strain.
The Path Forward: Striking a Balance
As the government prepares to unveil its spending plans, the NHS finds itself at a critical juncture. The proposed 4% budget increase, while substantial in comparison to recent years, may not be the panacea the health service desperately needs. Balancing the competing demands of workforce pay, waiting list reduction, infrastructure upgrades, and winter preparedness will require deft financial management and a willingness to make difficult trade-offs.
The success of the government’s strategy will ultimately be judged by its ability to deliver tangible improvements in patient care and to restore public confidence in a health system that has been battered by years of underfunding and neglect. As the nation watches with bated breath, the coming months will be a litmus test for the government’s commitment to the NHS and its capacity to navigate the complex challenges that lie ahead.
