How will the budget affect the NHS?

November 2018

The Chancellor re-stated the Government commitment to multi-year funding up to 2023/24. At the time of announcement this ammounted to £20.5bn extra by the end of the five years. However, the "extra" funding will only apply to the NHS, not the whole Department of Health and Social Care. This means social care funding will fall by £1bn in real terms in 2019/20.


What has been announced?

The budget funding increase announced only applies to NHS England, rather than the Department for Health and Social Care as a whole. The funding settlement announced in June 2018 amounts to 3.4% real term growth over the next 5 years.

Source: King's Fund November 2018

The settlement agreed does not include anything outside of the NHS mandate. The DSHC will receive decisions on its budgets and how to treat pension costs in the 2019 Spending Review. The spending review was set to be announced in Summer 2019, but has been delayed by the resignation of Theresa May as PM and the subsequent Conservative leadership party election. It will be down to Borin Johnson's new Government to announce the spending review, but when this will happen is unknown as yet.

It was also suggested in early June that the spending review may just set out plans for the next year, as opposed to the usual 3/4 years.

The DSHC budget includes spending on: education and training for doctors, nurses and other health professionals; public health grant money to local councils to deliver services such as sexual health and children’s services; and most capital funding for buildings and equipment. Additionally, it also includes the running costs of the CQC and NICE - who are central to ensuring quality of care across the NHS.

With the budget of DSHC still hanging in the balance, as things stand it is set to lose £1bn in real terms by the end of 2020. This will lead to further budget squeezes on public health and training. So, despite NHS budget increases without similar increases in funding for the whole of DSHC services are still set to be struggle.

In January 2019, the PM and Simon Stevens announced a new NHS long-term plan. See our report on why the new funding announcement is a "giant sticking plaster" here. Also you can read the experts consensus on the funding announcement, here.