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The NHS in England risks being locked in “a cycle of crises” in which it can only meet immediate needs unless Rachel Reeves lifts average day-to-day funding by at least 2.5 per cent a year in the spending review, a think-tank has warned.
The estimate by the Health Foundation comes after health service leaders told the Financial Times they were braced for the chancellor to increase real-terms, day-to-day spending by only about 2 per cent — a less generous uplift than in the Autumn Budget.
Even to manage with 2.5 per cent — far behind the long-run annual average of 3.7 per cent — the NHS would need to have achieved annual productivity gains of 1 per cent from 2023-24 onwards, its report found, well above the 0.7 per cent long-term pre-pandemic average.
Ministers use spending reviews to decide how to allocate funding between government departments. The last multiyear spending review was in 2021, when then Conservative chancellor Rishi Sunak apportioned money for three years.
The comprehensive spending review period to be set out by the chancellor on June 11 will specify departmental day-to-day spending until 2029 and capital budgets until 2030.
While occurring against a backdrop of “fiscal and economic uncertainty”, the Health Foundation said the review was “a crucial moment for the government to signal the scale of its ambition to tackle the health challenges facing the nation”.
Wes Streeting’s long-awaited 10-year plan for the NHS is due out soon, after the health secretary described the service as “broken” and vowed to deliver three “big shifts” in how care is delivered: from hospital to community, from analogue to digital and from sickness to prevention.
The think-tank noted that improvements in life expectancy had stalled since 2011, health inequalities were widening and record numbers of people were out of work because of poor health.
The number of people in England living with major illnesses such as cancer, diabetes and kidney disease will rise to about 9.3mn by 2040, 2.6mn more than in 2019. The total will include 3.7mn people aged between 20 and 69, according to its forecasts.
Ruth Thorlby, assistant director of policy at the Health Foundation, said if funding did not increase sufficiently, there would be “a serious risk that the health service stays locked in a cycle of crises only able to respond to acute needs”.
The NHS “wasn’t set up to go it alone. Investment is urgently needed to avoid further decline in our social care services”, she added, pointing to calculations that social care would need an additional £3.4bn by 2028-29 “just to meet demand and rising provider costs”.
Meantime capital funding would need to rise annually by 10 per cent between 2024-25 and 2029-30 to “match the investment of comparable countries”, the report found.
England had spent almost £40bn less than peer countries on health assets and infrastructure since the 2010s, according to a highly critical government-commissioned review by surgeon Lord Ara Darzi last year.
Streeting’s anticipated shift from treatment to prevention would also not happen “without greater investment in prevention and reducing health inequalities”, the report said, particularly by restoring the public health grant, which pays for local authorities to support drug and alcohol services, among others.
Restoring the grant to the real-terms equivalent of 2015-16 levels per person “and allocating it on an equitable basis” would need an extra £3.6bn over the spending review period, the think-tank found.
The Department of Health and Social Care said it was “backing the NHS with £26bn to help rebuild our broken health system. Investment must go hand in hand with reform, which is why we are cutting red tape.”
