Written statement on Mental Health: Expected Spend for 2025-26 - March 27

Secretary of State for Health and Social Care (Wes Streeting): Today I am publishing this third annual statement, following the one made in March 2024 by my predecessor. The Health and Care Act 2022 introduced a statutory requirement for the Government to publish an annual statement setting out expectations for NHS mental health services spending. The statement aims to strengthen the accountability and transparency on decisions and spending relating to mental health, as part of the Government's commitment to improve mental health services.

It also supports the Government's commitment to uphold the mental health investment standard, which requires that integrated care boards' (ICBs) spending on mental health grows at least in line with growth in overall recurrent funding allocations. This statement covers ICB spend on mental health within scope of the mental health investment standard as well as national spending on mental health through transformation funding and through NHS England's specialised commissioning. I am pleased to update the House that we will meet the mental health investment standard for the coming year.

Owing to the statutory requirement to make this statement before Parliament ahead of the new financial year, the figures for 2025-26 are the best current estimate based on projections that take account of the NHS Planning Guidance allocations, which have been published on 30 January 2025. Figures for 2024-25 are based on month 11 forecast, as full year spend is not yet available. There have been minor changes to the recurrent baseline in 2023-24 due to final adjustments at year end, while the 2024-25 recurrent Mandate now includes the impact of additional funding provided for elective recovery and the 2024-25 pay awards. Our 2025 Mandate lays the foundation for longer-term reform and included improving the mental health of the nation as a priority of this Government and for the NHS.

I recently announced changes to the NHS operating model to move power from central government to local leaders. The Darzi investigation highlighted that there were too many targets set for the NHS which made it hard for local systems to prioritise their actions or be held properly accountable. We are giving systems greater control and flexibility over how funding is deployed to best meet the needs of their local population. The NHS Planning Guidance for 2025-26 sets out the first steps for reform and the immediate actions we are asking systems to take to deliver on the three big shifts needed to move healthcare from hospitals to the community, analogue to digital, and sickness to prevention.

As stated above, I am committed to the mental health investment standard to support this government's national mental health objectives and, as outlined in the Planning Guidance, we expect all Integrated Care Boards to meet the MHIS in 2025-26. Ring-fenced funding for mental health will support the delivery of our key priorities, increase the number of children and young people accessing services, reduce local inequalities in access and improve productivity. This commitment will support the delivery of effective courses of treatment within NHS Talking Therapies and increase access to Individual Placement and Support, so we can reach those in most need of support while also supporting the government's objectives on economic growth.

In financial year 2024-25, mental health spending amounted to £14.9 billion and all 42 integrated care boards are forecasting to meet the mental health investment standard. Real terms spending on mental health in 2024-25 is forecast to be £695m higher than in 2023-24.

For 2025-26, mental health spending is forecast to amount to £15.6 billion. This represents another significant uplift in real terms spending on mental health - £320 million - compared to the previous financial year. Real terms growth in budgets will enable us to continue the rollout of our manifesto commitments, including recruiting 8,500 mental health staff, modernising the Mental Health Act, providing access to specialist mental health professionals in every school, and creating a network of community Young Futures Hubs.

The proportion of spend is almost exactly the same as it was last year, with a difference of just 0.07%. This is because of significant investment in other areas of healthcare. Much of this investment in other areas, such as investment to improve general practice, will also have secondary benefits for mental health care.

There are also important elements of mental health spending which are not included in these figures. This includes capital spending, where we have committed £75 million of investment to reduce out-of-area placements, as well as prescribing for mental health, spend on Continuing Healthcare and NHS England's routine spend on training new mental health staff.

Total forecast mental health spend in the table above includes ICB spend on mental health (which contributes to the MHIS) and in addition, at NHS England level, service development fund spending and specialised commissioning spending on mental health. The Autumn Statement 2023 funding for the expansion of NHS Talking Therapies – protected in the 2024 Budget settlement - which totals to £69 million, is included in the total mental health spend in 2025-26. Additional Spring Budget 2024 and Autumn Budget 2024 funding for the expansion of Individual Placement Support, which totals £42 million, is also included.

These figures are different to those on the NHS mental health dashboard, which includes learning disabilities and dementia spend in addition to mental health spend. It also compares ICB mental health spend to ICB allocations.