The headline settlement for the NHS was generous. However, a redefinition of what counts as "NHS spending" conceals a less favourable picture. While NHS England’s budget will increase by £7.6 billion in real terms over the period, this will come at the expense of a £3 billion cut for other areas of health spending. Public health spending will fall by at least £600 million in real terms by 2020/21, on top of £200 million already cut from this year’s budget. This will affect a wide range of services including health visiting, sexual health and vaccinations.
The additional spending will rightly be focused in the earlier years of the parliament, with a significant increase in 2016/17. However, much of this money will be absorbed by dealing with deficits among NHS providers and by additional pension costs.
Spending on social care is likely to be broadly flat through the next parliament. We welcome additional funding from the council tax precept and Better Care Fund. However, the council tax precept is unlikely to raise as much as initially claimed, and the extra funding will not be enough to close the social care funding gap which we estimate will be somewhere between £2.8 billion and £3.5 billion in 2019/20.
Overall, spending on health and social care will continue to fall as a percentage of GDP. Given rising need for these services they will continue to be under intense pressure, and especially for social care, a new settlement will eventually be needed.
Nuffield Trust, King's Fund and The Health Foundation (2015) The Spending Review: what does it mean for health and social care?