The chancellor Rachel Reeves has announced a £29bn real terms funding boost for the NHS over the next three years, in her much-anticipated spending review.
This equates to a 3% increase in annual day-to-day spending from 2023/24 to 2028/29, making the spending £226bn by the end of the period and therefore delivering the ‘largest ever’ health capital budget.
She added there would also be a £2.3bn real terms increase in the Department of Health and Social Care’s (DHSC) annual capital budgets from 2023/24 to 2029/30, which would include money for new technology, primary care and hospitals.
The chancellor also pledged additional funding by 2028/29 for the training of ‘thousands more GPs’, and an increase in funding of £4bn for adult social care in 2028/29, compared to 2025/26, which aligns with the Government’s ambition to treat more patients outside of hospital settings.
An investment of at least £80m per year for tobacco cessation programmes and enforcement to support delivery of the Tobacco & Vapes Bill was also announced to improve the health of the nation and reduce demand on the health service.
NHS technology and digital transformation is also set to get ‘up to £10bn’ by 2028/29 as part of the spending review settlement, which the Government said is ’an almost 50% increase from 2025/26’.
Spending review savings and efficiencies
Announcing the spending review 2025 in the House of Commons, Ms Reeves said: ‘We are shifting care back to the community, providing more funding to support the training of thousands more GPs to deliver millions more appointments.
‘I am proud to announce today that this Labour Government is making a record cash investment in our national health service, increasing real terms day to day spending by 3% per year for every single year of this spending review, an extra £29bn per year for the day to day running of our health service.’
The DHSC has committed to delivering at least 5% of savings and efficiencies over phase two of the review period.
‘This includes savings and efficiencies identified through the department’s zero-based review (ZBR) and the technical efficiencies which DHSC has worked with the Office for Value for Money (OVfM) on,’ it said. ‘This includes £17 billion savings over three years released by achieving 2% productivity. The NHS will also reduce the need for temporary staff by setting limits on agency spend, including eliminating agency usage for entry level roles. This will build on the near £1bn reduction in agency spend delivered in 2024/25.’
The spending review sets out planned day-to-day spending totals for all Government departments for the years from 2026/27 to 2028/29, and investment spending plans for a further year (from 2026/27 to 2029/30).
Clinicians respond to the spending review
While healthcare leaders have welcomed the much-needed cash injection into the health service and investment in digital infrastructure, many have highlighted the urgent need to tackle the social determinants of health and close the gap on health inequalities and called for further improvements to support the workforce.
In response to the spending review, Dr Mumtaz Patel, president of the Royal College of Physicians commented that ‘the additional funding announced today is vital for the Government to get anywhere near its ambition to improve NHS services, achieve its waiting list target and deliver its proposed three shifts.’
He added: ‘The Government is right to back its analogue to digital ambitions with an increased £10bn NHS technology and transformation by 2028/29. We know many physicians on the frontline are currently using antiquated systems and are keen to see improvements in the analogue to digital shift. As we said in our Prescription for Outpatients report earlier this year, we support the NHS App being the digital front door to the NHS. It has the potential to reduce complexity, and mean patients can access care between or instead of traditional appointments.’
Responding positively to the Government’s spending review commitment to investing in the enforcement of the Tobacco & Vapes Bill and to support smoking cessation services, Dr Patel said there is still ‘more to do’.
‘There continues to be an almost 20-year gap in healthy life expectancy between the most and least deprived areas of England, with 2.5 million more people projected to be living with a major illness by 2040. Government came into office promising to tackle the social determinants of health. A clear strategy to tackle health inequalities, and avoidable illness, is vital to reduce NHS demand and ensure that the health service is fit for the future,’ he said.
Professor Steve Turner, president of the Royal College of paediatrics and Child Health, echoed these sentiments, saying: ‘As paediatricians we continue to call for greater ambition to tackle child poverty, which has untold harms on the health and wellbeing of children. This ambition must include scrapping the two-child limit, which continues to push many families into hardship.’
He added: ‘Knowing that investment in child health services lags behind adult services, a successful shift requires the health system to allocate this funding equitably between them. This is also true in the devolved nations where we hope today’s allocations will be used to support children’s health.’
Support the NHS clinician workforce
Dr Katharine Halliday, president of the Royal College of Radiologists, commented that the significant funding boost announced in the spending review would help to revitalise and futureproof the health service, but she highlighted concerns over support for the workforce.
‘We hope to see this reduce agonising waiting times for patients and relieve pressure on hardworking staff. The continued investment in scanners and other essential equipment is a positive step towards this goal. Its success depends on recruiting, training and retaining the diagnostic and cancer workforce, which faces a severe shortage of doctors,’ she said.
‘We welcome efforts to cut spending on temporary staffing, but this must be matched by more permanent roles for doctors who spend years training to work in our NHS – and that means scrapping illogical recruitment freezes for radiologists and oncologists.’
The Royal College of Surgeons of England (RCS England) has said the spending review failed to sufficiently address the urgent need for capital investment to modernise surgical theatres and hospital infrastructure.
Professor Vivien Lees, RCS England vice president, said: ‘Every delayed operation is a patient left waiting in pain, or with loss of function. While the Government’s spending review offers a welcome day-to-day funding boost for the NHS, it falls short of what is needed to meet ambitious waiting time targets, and get back to providing timely care to patients.
‘It is disappointing capital funding for the NHS will remain flat for the next three years. The forthcoming 10 Year Infrastructure Strategy must outline how the Government will improve investment in NHS infrastructure. Otherwise, surgeons will continue to work in outdated theatres and crumbling buildings that hamper their ability daily to get on with the job of treating patients. You can’t deliver 21st-century care in 20th-century facilities.’
In the meantime, attention inevitably now turns to the imminent 10 Year Health Plan and NHS Long Term Workforce Plan refresh in the autumn, which healthcare leaders say must set out robust plans to meet growing demand for NHS resources and prioritise workforce retention.
