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May’s funding boost not enough to counter austerity years

Is the Prime Ministers financial settlement for the NHS enough to rectify a decade of austerity?


NHS Providers has warned that the extra money announced by the government is not enough to help the NHS recover from the ravages of austerity over the past decade.


The NHS funding settlement: recovering lost ground puts forward the organisation’s ideas on how the additional money should be spent. It is designed to shape decisions on what it will take to recover performance alongside other priorities such as increasing costs and demand for treatment, transforming services, and improvements in areas such as cancer and mental health.


The report states: ‘The health service wants to transform and improve, but it is clear that recovering lost ground would take up a large chunk of additional NHS spending, severely restricting the options for other key priorities.’


The report sets out illustrative costs of closing financial and performance gaps:

  • recovering the 18-week target for routine operations would cost £950m a year for three years.
  • funding for the equivalent of an estimated additional 7,825 hospital beds needed to cope safely with added pressures would cost almost £900m
  • restoring the mental health and community nursing workforce to 2010 levels, before the funding squeeze began, would cost nearly £350m a year for the next three years, before even starting to address the unmet need and increased demand for care
  • tackling backlog maintenance on the NHS estate would cost at least £1.2bn a year for three years


It also assesses the cost of:

  • clearing the NHS provider sector deficit
  • reducing unsustainable one-off savings
  • reversing cuts to unprotected health budgets, including public health and workforce development
  • funding pay rises for doctors
  • further targeted spending to reduce delays in transferring people who are medically fit to move on


Deputy chief executive of NHS Providers, Saffron Cordery, said: ‘The Prime Minister’s NHS funding commitment, taking average annual increases over the next five years to 3.4%, is welcome, as is the decision to invest before the comprehensive spending review.


‘But set against experts’ estimates that 3.3% would be required just for the NHS to stand still, it poses big questions about future priorities which will have to be addressed in the NHS’s 10-year plan… We would be fooling ourselves to think there are any simple short cuts to recovery.’


Further information

Institute for Fiscal Studies: Cost pressures on the NHS will only grow: it needs a long-term funding solution, and that is likely to mean substantial tax rises

NHS Providers: Recovering NHS performance risks swallowing up new funding

Wilmington Healthcare: NHS England to get 3.4% funding rise