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Knowledge Hub

NHS England to get 3.4% funding rise

What difference will the funding make to healthcare?


The Government has agreed to increase NHS England’s budget by an average of 3.4% over the next five years.


The move, which follows increases averaging 1% in the years since 2010, was announced by Prime Minister Theresa May during a BBC interview. It marks a significant change of policy direction that will be welcomed by patients, industry and NHS staff.


Health Service Journal editors report that the increase will mean an extra £4-4.5bn a year for NHS England. In inflation adjusted terms it equates to a rise of around 3%.


However, this is less than the average 3.7% annual funding increase since 1948 and significantly less than the 4.3% growth in demand predicted by the Office for Budget Responsibility (OBR).


The funding boost is restricted to NHS England and does not include wider Department of Health and Social Care (DHSC) areas of activity, such as health education and training, and public health.


NHS England chief executive Simon Stevens and NHS Improvement chief executive Ian Dalton welcomed the rise, which they said meant a more certain future for the NHS.


Health Foundation director of research and economics Anita Charlesworth warned that although the funding will help stem further decline in service delivery, it would not ‘address the fundamental challenges facing the NHS or fund essential improvements’.


The government said the extra funding will come partly from unspecified tax increases and partly from a ‘Brexit dividend’.


Further information DHSC

Health Foundation: Health Foundation response to government announcement of additional NHS funding

Health Service Journal: NHS gets 3.4% a year

OBR: Fiscal sustainability report — January 2017