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Minimal funding increase for NHS

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The government has confirmed dramatic cuts to public spending in the next four years, and said there will be a minimal real terms increase in health spend each year.

Total annual spending would be cut in real terms by the equivalent of £81bn by 2015, George Osbourne announced in today’s government spending review.

He said health spending would increase from £104bn in 2010-11 to £114bn in 2014-15. The government said this was “a total increase of 0.4 per cent in real terms” over the period.

That represents an annual real terms increase of approximately 0.1 per cent. The Conservatives had promised annual real terms increases before the general election.

Mr Osbourne said it would be funded by cuts in other areas. He said: “The NHS is an intrinsic part of the fabric of our country. To govern is to choose, and we have chosen the NHS.”

He said it did not mean the government was “letting the health department off” the need to improve efficiency, and said NHS productivity had fallen under the previous government.

Mr Osbourne said: “[The DH] are aiming to save £20bn by 2014 but the money we save will be reinvested.”

Other announcements affecting health include:

  • The NHS will contribute £1bn annually to providing social care by 2014-15.
  • Confirmations of cuts to captital budgets. In health, capital funding will be cut from £5.1bn in 2010-11 to £4.6bn in 2014-15.
  • There will be a ring fenced allocation to local authorities for public health, which is transferring from primary care trusts under reform plans.
  • The government plans to save £1.8bn annually from public sector pensions by 2014-15.
  • All departments will publish “reform plans for the next four years” next month.

Article from our sister HSJ

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