Department of Health's settlement at the Spending Review 2015
The Chancellor has published the results of the Spending Review, including details of DH's budget over the course of this Parliament.
The Spending Review and Autumn Statement delivers on the government’s priority to provide security to working people at every stage of their lives. It sets out a 4-year plan to fix the public finances, return the country to surplus and run a healthy economy that starts to pay down the debt. By ensuring Britain’s long term economic security, the government is able to spend £4 trillion on its priorities over the next 4 years.
For the Department of Health, this means:
- £10 billion real terms increase in NHS funding in England between 2014-15 and 2020-21, of which £6 billion will be delivered by the end of 2016-17, and £4.8 billion capital funding every year for the next 5 years
- transforming the NHS into a 7-day service and investing in new clinical strategies for cancer and mental health, and enabling the provision of up to 10,000 additional nursing and health professional training places this Parliament
- integrating health and social care services by 2020, supported by a strong funding settlement for social care
- £22 billion of efficiencies to be made within the NHS by 2020-21, with savings reinvested into frontline health services, as set out in the NHS’s own plan, the Five Year Forward View, and actions to tackle deficits and ensure good financial management across the NHS
Department of Health
Baseline spending by financial year (£ billion)
| Type of baseline spending | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2010-21 |
|---|---|---|---|---|---|---|
| Resource department expenditure limits (DEL)* | 111.6 | 115.6 | 118.7 | 121.3 | 124.1 | 128.2 |
| Capital DEL | 4.8 | 4.8 | 4.8 | 4.8 | 4.8 | 4.8 |
| Total DEL | 116.4 | 120.4 | 123.5 | 126.1 | 128.9 | 133.1 |
Note: In this table, Resource DEL (*) excludes depreciation.
NHS
Outturn spending per financial year (£ billion)
| Type of outturn spending | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 |
|---|---|---|---|---|---|---|---|
| NHS total DEL* | 98.1 | 101.3 | 106.8 | 110.2 | 112.7 | 115.8 | 119.9 |
| Real terms growth rate | – | 1.9% | 3.6% | 1.3% | 0.4% | 0.7% | 1.4% |
| Cumulative delivery of £10 billion commitment** | – | 2 | 6 | 7 | 8 | 9 | 10 |
Notes: In the above table, Resource DEL (*) excludes depreciation. The additional £10 billion real terms funding (**) is calculated with reference to the Summer Budget 2015 deflators, consistent with when the commitment was made.
Security
Because the government is securing a strong economy, it is able to invest in a strong NHS. Over the next 5 years, the government will invest over half a trillion pounds in the NHS. This investment will mean that by 2020-21, the NHS will provide 800,000 more operations and treatments, 5.5 million more outpatients’ appointments and over 100 million more free prescriptions.
Long-term investment
The £10 billion real terms increase in NHS funding by 2020-21 will deliver 7-day services in primary care and in hospitals. By 2021 everyone will be able to access GP services in the evenings and at weekends with an extra 5,000 doctors in general practice. This will be supported by £750 million of investment and a new national voluntary contract for GPs.
In hospitals, patients will receive excellent care irrespective of the day they are admitted, in all key hospital services by 2020.
The government will implement the recommendations of the Independent Cancer Taskforce so that by 2020 patients referred for testing by a GP should be diagnosed for cancer, or given the all clear, within 4 weeks. In addition, the government will be investing up to £300 million per year on diagnostics by 2020 to fund new equipment and additional staff capacity, including 200 additional staff trained to perform endoscopies by 2018.
Investing an additional £600 million in mental health services will mean that significantly more people will have access to talking therapies every year by 2020. NHS England’s Mental Health Taskforce will report in early 2016 and the government will work with them to set out transformative plans, including for perinatal mental health and coverage of crisis care.
The UK will invest up to £150 million in a new Dementia Research Institute to draw together world leading expertise to accelerate the pace of research and tackle the progression of the disease. This is the government’s latest step in a long term strategy to combat dementia which already includes over £300 million committed for UK research and a separate global fund to drive international innovation.
The government will invest over £400 million over an 8-year period in a new ‘science hub’ which will provide world class Public Health England labs at Harlow, Essex, and help protect the public from threats such as flu and Ebola. This will relocate existing facilities from Porton Down and Colindale into one integrated site.
The government has allocated £4.8 billion capital funding for health every year for the next 5 years. This includes funding for a shift in the way urgent and emergency care services are provided and improving out of hospital services to deliver more care closer to home. New investment of £1 billion in technology will support this transformation and integrate patient records across health and social care by 2020. Over the next 5 years, at least £500 million will be invested in building new hospitals.
The government will invest over £5 billion in health research and development over the next 5 years to fund key priorities such as the 100,000 genomes project, research into antimicrobial resistance and investment in the Ross Fund to tackle malaria.
Efficiency and reform
The NHS has committed to deliver its £22 billion in efficiency savings by 2020-21 to deal with rising demand. This will be achieved by reducing running costs, paying the right price for equipment, reducing avoidable hospital admissions, and improving care quality.
The plan to deliver these efficiencies from across the health system is already underway. Lord Carter’s review of acute NHS trusts found, on average, hospitals could save between 5% and 15% of their expenditure. The Carter Review is helping hospitals get the most out of their workforce by using smart rostering systems and improving staff management practices to ensure staff spend more time with patients and less on paperwork; ensuring improved stock management of medicines in hospital pharmacies to reduce wastage (£1 billion); and achieving procurement savings (£1 billion) from bulk buying day to day items for the NHS.
DH plans to sell nearly £2 billion of assets over the next 5 years, which will release land to build at least 26,000 new homes.
DH itself will deliver savings from its central spending outside the NHS Mandate, which will free up resources for the front line NHS.
As part of this, the government will reform the funding system for health students by replacing grants with student loans and abolishing the cap on the number of student places for nursing, midwifery and allied health subjects, enabling the provision of up to 10,000 additional nursing and health professional training places this Parliament. This will reduce the current reliance on expensive agency staff. The move to loans will also mean access to 25% more financial support for health students during their studies.
This Spending Review finishes the job of reforming the public health system, delivering average annual real-terms savings of 3.9% over the next 5 years. Across the country, councils have already begun to develop new ways to deliver public health, showing that it is possible to deliver better health for local people and also better value for the taxpayer, but there is more to be done. Councils can seek to deliver efficiencies in this area, and can learn from best practice. So it is right that as the government eliminates the deficit, all funding is spent in the best way possible. Public Health England will continue to support local authorities in this process.
The government will encourage long term partnerships between the NHS and the private sector to modernise buildings, equipment and services, and deliver efficiencies, especially where these partnerships support the upgrade of diagnostics capabilities and the development of new models of care, such as Accountable Care Organisations and hospital groups.
Devolution
The government will integrate health and social care services by 2020. Each part of the country will develop plans for this by 2017, to be implemented by 2020. Local areas will integrate in different ways using a range of models which the government supports.
Health Secretary Jeremy Hunt said:
For doctors and nurses working harder than ever on the frontline this upfront investment means we can implement the NHS’s own ambitious plan to transform services for the future. We are passionate about building an NHS that offers the safest, highest quality care anywhere in the world - with services smoothly operating 7 days a week.
This new money will help us finish the job.