Boris Johnson announced plans to spend £1.8bn more on the health service this weekend.
But NHS experts have cast doubt on whether the money is really new, and whether it is enough to make a difference to cash-strapped hospitals.
The announcement
Writing in the Sunday Times, the Prime Minister said: “It is thanks to this country’s strong economic performance that we are now able to announce £1.8bn more for the NHS to buy vital new kit and confirm new upgrades for 20 hospitals across the country.”
The Department of Health and Social Care put out more details of how the £1.8bn would be carved up. Existing plans to upgrade 20 hospitals would go ahead, at a cost of £850m.
The remaining £1bn or so would be spent on NHS capital spending, “allowing existing upgrade programmes to proceed and tackling the most urgent infrastructure projects”.
If the government spends more on the NHS in England, there’s an automatic uplift for Wales, Scotland and Northern Ireland too under the Barnett Formula, to the tune of £110m, £180m and £60m respectively.
New money?
In a BBC interview, Mr Johnson said: “I want to stress, this is new money.”
But Sally Gainsbury, a senior policy analyst at the Nuffield Trust health think-tank, raised a sceptical eyebrow in a Twitter thread.
Ms Gainsbury said many NHS providers have built up cash pots over the last three years that they planned to spend on capital projects – like new equipment and repairs to buildings.
Trusts that showed they could run a surplus by cutting day-to-day spending and were rewarded by the government with cash they could spend later on capital items.
Ms Gainsbury reported in April this year that the Department of Health and Social Care was planning to welch on this deal and stop providers from going on a long-awaited spending splurge, due to concerns about breaching department capital spending limits.
The latest announcement simply means that the current government has changed its mind about tightening the departmental spending limits, allowing trusts to spend around £1bn they had already earned by making other savings.
The government doesn’t appear to dispute this account, although we understand that the remaining £850m comes from a different source, and the cash announced this weekend is on top of money previously announced at Budgets and Spending Reviews.
Other NHS experts are backing Ms Gainsbury’s explanation but are being diplomatic about whether this means the Prime Minister is misleading voters over the source of the “new” money.
Sally Warren, director of the King’s Fund health think tank, said “At one level, yes, it is new money. If the Treasury today were not providing this money, NHS trusts would not be able to spend this £1.8 billion.
“But another view is that actually – particularly the £1 billion that’s been announced today – is really reversing cuts that trusts were asked to make this year.”
Chris Hopson, chief executive of NHS Providers, said: “Frontline NHS providers will be able to spend £1 billion in 2019-20 on backlog maintenance and other capital spending that they weren’t able to spend last week.
“The Department of Health and Social Care’s capital spending limit will be increased accordingly and that will count against overall government capital spending limits. By our definition that is genuine, new, extra money.
“At the same time, the health think tanks are correct that some of the extra 2019/20 capital expenditure enabled by this announcement will be funded through cash surpluses currently sitting on provider balance sheets.
“That spending can legitimately be described as money that trusts already had, but were told they couldn’t spend and are now able to spend.”
Verdict
Boris Johnson announced £1.8bn of “new money” for the NHS, but the word “new” is doing a lot of hard work here.
If the Nuffield Trust’s account is correct – and we’ve seen no evidence that the government disputes it – then £1bn of the funding is money that NHS providers effectively earned as a reward from making savings in other areas.
As the muted response to the announcement suggests, NHS trusts are pleased at being allowed to get £1bn more than they thought they might have got a week ago.
But the basic story is that the government has freed up this money by agreeing to stick to an earlier deal.
We need to remember the overall financial picture too. The Health Foundation says the NHS has built up a maintenance backlog of at least £6bn after years of real-terms cuts to capital budgets.
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