Spending review and autumn statement 2015

25 November 2015

The government published its spending plans, committing to providing the NHS in England with £10bn more per annum in real terms by 2020/21 than in 2014/15. By the first year, £6bn per annum would be available to fully fund the Five year forward view for the NHS in England, 'enabling it [the NHS] to deliver services 7 days a week'. The government also outlined that it would increase NHS spending in England from £101bn in 2015/6 to £120bn by 2020/21.

The government's commitment to increase annual NHS funding by £10bn by 2020/21 was only applied to NHS England's budget and not to total health funding. As a result, the wider health budget would face a real terms reduction of over 20% between 2015/16–2020/21.

The Chancellor of the Exchequer, George Osborne, announced that the government would 'make savings in local authority public spending'. He forecast that the central grant from the Department of Communities and Local Government (DCLG) would fall by 56% between 2015/16–2020/21, but this would be offset by other changes, so that overall funding to local authorities would fall by 6.7%.

George Osborne also said the government would consult on options to fully fund local authorities' public health spending from their retained business rates receipts, but confirmed that the ringfencing of public health spending would be maintained in 2016/17 and 2017/18. The publication also said that the spending review was finishing 'the job of reforming the public health system, delivering average annual real-terms savings of 3.9% over the next five years'.

The spending review also made major reforms to the way in which health students were funded, replacing grants with student loans and abolishing the cap on the number of student places for nursing, midwifery and the allied health professions.

While the spending review and autumn statement highlighted 'the biggest ever investment in the healthcare system', analysis by the Health Foundation showed that the spending review had actually redefined and shrunk the scope of NHS services that would be protected from reductions in spending. The total health budget was projected to rise by £4.5bn in real terms over the next 5 years, an increase of less than 1% above inflation.

Source(s)

HM Treasury.
Spending review and autumn statement 2015.
HM Treasury; 2015.

Health Foundation.
Health Foundation responds to government's Spending Review.
Health Foundation; 2015.