Chart of the week: More money for the NHS front line, but what about the rest?

Each week we present analysis of data in chart form to illustrate some key issues and invite discussion. While last week’s Spending Review brought significant increases in NHS and capital spending, John Appleby and Mark Dayan show how certain health budgets are facing another financial squeeze despite seeing real-terms cuts for much of the past decade.

Data story

Published: 04/11/2021

The Chancellor’s 2021 Spending Review will mean that overall English revenue or day-to-day funding for health rises by £18.6 billion – an increase in real terms of 12.6% between 2021/22 and 2024/25. This is a fairly generous settlement, averaging about 4.1% a year. But digging a little deeper shows us that the generosity is far from evenly spread.

The bulk of the increase – £15.8 billion – will be given to NHS England to pass on to hospitals, GPs and other providers: paying for wages, supplies and equipment. The remaining £2.8 billion will be spread across budgets which secure strategic needs for the health service or which go beyond health care, including training for doctors and nurses, public health, research, and regulation for quality.

But as the chart below shows, it has been these functions – including public health – that have seen a real cut in funding of up to 30% between 2014/15 and 2020/21. And despite a boost at the start of the Spending Review period in 2022/23, by the end of the period, planned spending will be 5% lower in real terms than it was a decade earlier in 2014/15.

The budget of Health Education England, which oversees and funds training across the board, saw real-terms cuts for most of the past decade. This resulted in cuts to continuing professional development funding for nurses and other staff, and impeded the ability to respond to the growing workforce crisis by either training more staff or stopping them from leaving. The public health budget passed to local authorities, meanwhile, is 25% lower than it was a decade ago, and the Spending Review commits only to keep it at this level in real terms.

In fact, these wider functions may face an even more difficult future than the graph suggests. This year and last, the costs of tackling Covid-19, such as funding Test and Trace, have been counted separately and are removed from the graph. But from next year, temporary money to control the virus will simply be taken out from non-NHSE revenue funding. Despite significant increases in NHS and capital spending paid for through taxes, some key health budgets face a further financial squeeze on the back of a decade of austerity.

NHS funding: where is it going? 04/11/2021

Chart

Note:  

This graph shows revenue spending by Department of Health and Social Care in each year since 2014/15, and how much revenue spending it has been allocated from this year onwards according to the 2021 Spending Review. The figures refer to spending against the Departmental Expenditure Limit. They are given relative to 2014/15, adjusted for inflation based on the latest GDP deflators published by the OBR. They show spending by the NHS England group including NHS trusts (NHSE revenue); by other parts of the DHSC, such as the public health and training budgets (Non-NHSE health spending); and by the combined total of the two (Total health spending).

Source:  

Nuffield Trust analysis of DHSC annual accounts 2019/20 and Spending Review 2021 budget figures.

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