The Chancellor of the Exchequer presented her Spending Review to Parliament yesterday. Public spending will end up at 44.6% of GDP, the biggest spending spree since World War II. The NHS and local government will get more cash – but in a way that will “reinforce the same old model we know doesn’t work”, re-state bemoans. The NHS budget is now as big as Portugal’s GDP.
Extract from re-state.co.uk email…
BAD FOR
Health
All eyes were on the NHS funding settlement today, given that the financial fate of the NHS effectively determines that of almost every other department. As usual, the funding settlement for the Department of Health and Social Care is far more generous than it is for other public services. Today Rachel Reeves announced an average annual 3% real-terms increase in revenue funding for the NHS, while few departments are receiving even half this increase.
And puzzlingly, in a Spending Review defined by capital investment, the NHS remains they exception. After significant increases in the last two years, CDEL budgets are set to remain flat in real terms between now and 2028-29.
This combination is the worst of both: a revenue settlement considered insufficient to meet the elective backlog target by the end of this Parliament, but at the expense of several other departments, while tightening the capital funding that could actually generate meaningful progress.
Although a commitment to increase technology and digital transformation spending by up to £10 billion, primarily from revenue spending, is very welcome, it is a drop in the ocean. This will not incentivise fundamental reform, but instead only serve to reinforce the same old model we know doesn’t work — all at the expense of other cost-effective services that can relieve pressure off the NHS.
