The UK government, Scottish Government and Welsh Governments have
each now published their final updated budgets for the current
financial year, 2023–24 (see here, here and here), confirming sizeable
top-ups to health spending. New analysis by IFS researchers of
these updated budgets and published spending plans for 2024–25,
shows that as a result, health spending is currently budgeted to
fall in real-terms health in the coming financial year in both
England and Scotland but increase modestly in Wales.
Currently planned spending in 2024–25 will almost certainly need
to be topped up if cuts to staffing and service provision are to
be avoided. This is particularly true for England, where existing
plans entail real-term cuts of around 1.2% in day-to-day spending
– the largest reduction since the 1970s (following the 1976 IMF
crisis), except for the last two years as temporary funding
related to the COVID-19 pandemic has expired.
Holding back funding in reserve, as the UK government is
currently doing, and then potentially making in-year top-ups
during the course of the year can provide more flexibility to
respond to changing circumstances. However, given the evident
pressures on the NHS, it is almost certain that health spending
will be topped up significantly again during 2024–25. Leaving it
until near the end of the year to confirm this, as has been the
case in 2023–24 would make it harder than it need be for managers
to plan the efficient delivery of care over the year ahead. The
Budget this week provides an opportunity to confirm at least some
top-up prior to the start of the financial year instead,
providing more funding certainty to the English NHS and the
Scottish, Welsh (and Northern Irish) Governments.
David Phillips, an Associate Director and head of
devolved and local government finance at the Institute for Fiscal
Studies said:
‘Recently confirmed top-ups to health budgets across Great
Britain for the current financial year, 2023–24, mean that
current plans now imply cuts in health spending between this
financial year and next in both England and Scotland.
In reality there will almost certainly be further sizeable
top-ups to budgets in 2024–25. Cuts are not likely to be
consistent with either England’s ambitious workforce plans or
pledges to reduce waiting lists. Welsh health spending is
currently set to increase modestly in 2024–25 – by around 0.7% in
real-terms –, despite the Welsh Government having made by far the
biggest in-year top-ups to spending in the current financial
year. This reflects the fact that the Welsh Government plans cuts
to spending on a wide range of services to channel funding to the
Welsh health service in the coming year.’
READ THE NEW BRIEFING
HERE
ENDS
Notes to Editor
Health spending planned to fall in England and Scotland in
2024-25, suggesting a top-up likely is an IFS comment
by David Phillips
