Big money: how to read the Spending Review's headline figure

The Spending Review will be published on 11 June. It’ll be a big moment for the NHS because it will set out the funding settlement for the service for the next three years – and in that period we will have a big job to do to restore finances, implement the 10-year health plan, and improve access to care.
 
This year, the Department for Health and Social Care will spend about £200bn a year on revenue (day to day operating costs) and a further £14bn on capital (such as buildings and infrastructure) – so whether the NHS gets a tight budget or a generous one next week, the amounts of money involved are going to be big.
 
Often, when governments announce multi-year settlements, you’ll see a single large number but it can be hard to put that into context. So we’ve done some number-crunching to give an idea of what the announcement could look like, and what it might mean:
 
In all scenarios the NHS will be expected to deliver productivity improvements and absorb any above-inflation pay rises.

Flat in real terms: Cash boost of £12bn over three years. If the DHSC’s capital and revenue budgets rise only in line with the OBR’s inflation forecast, the NHS would be getting about £12bn more by 2028/29. But the cost of providing health services rises faster than inflation, due to a combination of factors like increases in technology, new advanced treatments, and an ageing population. For that reason, the NHS usually gets a settlement that rises in real terms.

1-1.5% real terms rise: Cash boost of around £20bn over three years. This would be in line with the tightest funding settlements the NHS received during the “austerity” years of 2010-15. 

2-2.5% real terms rise: Cash boost of around £25-30bn. This would be less than the NHS has received since the Covid-19 pandemic. It is harder to find a direct recent comparison for a settlement of this level – however it would be challenging. The NHS would need significant support to improve productivity to the extent needed to enable it to live within its means while reducing waiting times.

3.7% real terms rise: Cash boost of around £35-40bn. This would be in line with the long-run average funding increase from 1980 to 2020.

6.8% real terms rise: Cash boost of around £60bn. This would be comparable with the funding increases seen in the 2000s under the Blair/Brown governments.
 
These are rough estimates but hopefully will be a helpful yardstick when the Spending Review comes out next week.
 
As you’d expect, we have been hard at work constructively arguing for a settlement that will enable the NHS to increase productivity and deliver the government’s three shifts. You can read our submission to the 2025 Spending Review.