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Growth in health spending slows Growth in health spending slows
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The rate of growth in NHS spending in England will slow over the next three years to 4% a year over the rate of inflation.The rate of growth in NHS spending in England will slow over the next three years to 4% a year over the rate of inflation.
This will mean the budget will rise from £90bn this year to £110bn in 2010.This will mean the budget will rise from £90bn this year to £110bn in 2010.
Chancellor Alistair Darling said cash would fund 20 new hospitals, 140 new walk-in centres open seven days a week, and 100 new GP practices.Chancellor Alistair Darling said cash would fund 20 new hospitals, 140 new walk-in centres open seven days a week, and 100 new GP practices.
However, since 2002, the health service has enjoyed record yearly rises of over 7% after inflation.However, since 2002, the health service has enjoyed record yearly rises of over 7% after inflation.
The period of record investment was more than twice the average annual increase of 3.4% that the NHS received in the three decades before Labour came to power in 1997. The NHS has done well compared with other departments Niall DicksonKing's Fund
As a result spending on the health service as a percentage of gross domestic product has come close to the average of the 15 countries that made up the European Union in 2000. And the new increases fall short of those recommended by former banker Sir Derek Wanless in his review of the future of the NHS.
Pay rises He recommended real terms growth in the NHS budget of at least 4.4% for the four years from April 2008.
However, a large slice of the new investment has been taken up by substantial pay rises for hospital doctors, GPs and nurses.
READ THE REPORT Pre-Budget Report and Comprehensive Spending Review 2007 in full [1.5MB] Most computers will open this document automatically, but you may need Adobe Reader
In addition, structural reorganisation has cost many millions.
As a result the NHS ran up a deficit of £547m in the financial year ending March 2006, before balancing the books last year.
At present, the health service is predicted to finish the current financial year with a surplus of around £900m.
The big increase in NHS spending followed a review of the future needs of the health service carried out for the government by former banker Sir Derek Wanless in 2002.
Sir Derek accepted that the rate of growth in spending should slow down after big increases in the first five years.
But he said the NHS budget would still need to grow by between 4.4% and 5.6% a year in the four years after 2007-08.
Productivity boost neededProductivity boost needed
The independent think tank the King's Fund said the onus would now be on the NHS to improve productivity, and make progress in tackling unhealthy lifestyles.The independent think tank the King's Fund said the onus would now be on the NHS to improve productivity, and make progress in tackling unhealthy lifestyles.
Niall Dickson, the chief executive, said: "Reducing the annual real growth from what it has been over the last seven years will feel like a cut.Niall Dickson, the chief executive, said: "Reducing the annual real growth from what it has been over the last seven years will feel like a cut.
"However, in a fiscally tight spending review, the NHS has done well compared with other departments."However, in a fiscally tight spending review, the NHS has done well compared with other departments.
"A slow-down in the growth of funding should not damage patient care and the delivery of better services as the NHS has been planning for this slow down.""A slow-down in the growth of funding should not damage patient care and the delivery of better services as the NHS has been planning for this slow down."
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Professor John Appleby, the King's Fund's finance expert, said the new figures included around £1.8bn which had been clawed back this year after trusts failed to spend it on capital projects.Professor John Appleby, the King's Fund's finance expert, said the new figures included around £1.8bn which had been clawed back this year after trusts failed to spend it on capital projects.
Once this figure was taken into account the average rate of growth was closer to 3.1% a year over three years.Once this figure was taken into account the average rate of growth was closer to 3.1% a year over three years.
Nigel Edwards, of the NHS Confederation, said the NHS was now well placed to face a "challenging financial future and continue to improve the service for patients".Nigel Edwards, of the NHS Confederation, said the NHS was now well placed to face a "challenging financial future and continue to improve the service for patients".
Dave Prentis, general secretary of the health workers' union Unison, said: "We are glad that the Chancellor has not lost his nerve and slammed the brakes on public service investment.Dave Prentis, general secretary of the health workers' union Unison, said: "We are glad that the Chancellor has not lost his nerve and slammed the brakes on public service investment.
"The additional funds for the NHS will help see through health modernisation plans and prevent a return to the financial deficits dogging many health trusts in the recent past.""The additional funds for the NHS will help see through health modernisation plans and prevent a return to the financial deficits dogging many health trusts in the recent past."
The period of record investment which ends this year saw the NHS budget grow annually by more than twice the average rate of the previous three decades prior to 1997.
This lifted spending on the NHS close to the European average, as promised by former Prime Minister Tony Blair.
However, structural change, and big pay rises for doctors accounted for a big slice of the cash, and left the health service in deficit before it managed to balance the books in the last financial year.