Some £6 billion will be spent on speeding up testing and treatment in the NHS, Rachel Reeves has announced, after she placed the health service at the heart of Government spending plans.
The Chancellor unveiled the investment, which includes new scanners, ambulances and urgent treatment centres aimed at providing an extra four million appointments in England over the next five years, after Wednesday’s spending review.
The funding is aimed at reducing waiting lists and reaching Labour’s “milestone” of ensuring the health service carries out 92% of routine operations within 18 weeks.
In the review, Ms Reeves set out day-to-day spending across Government for the next three years, as well as plans for capital investment over the next four years.
The NHS and defence were seen as the winners from the settlement, as both will see higher than average rises in public spending.
This comes at cost of squeezing the budgets of other Whitehall departments and experts have warned tax rises may be needed later this year.
The Chancellor and Sir Keir Starmer both sought to portray the review as a “new phase” for the Government, following the criticism Labour has faced during its first year in power, including over cuts to winter fuel allowance.
Ms Reeves claimed the NHS had been “put on its knees” as a result of under-investment by the previous government, adding: “We are investing in Britain’s renewal, and we will turn that around.”
The new £6 billion investment will come from the capital settlement for the NHS and will also help to speed up diagnoses with scans and treatment available in places such as shopping centres and high streets.
The scale of day-to-day spending for the NHS is akin to an extra £29 billion a year.
In a broadcast interview on Wednesday evening, Ms Reeves said the Government was “confident” it could meet its pledge to reduce waiting lists after the boost to NHS spending.
But while health and defence have benefited from the review, the Home Office, Ministry of Housing, Communities and Local Government, Department for Culture, Media and Sport, Department for Transport and Department for the Environment, Food and Rural Affairs are all in line for real-terms cuts in day-to-day spending.
The Foreign Office is also in line for real-terms cuts, mainly as a result of a reduction in the overseas aid budget, which was slashed as part of the commitment to boost defence spending to 2.6% of gross domestic product – including the intelligence agencies – from 2027.
Ms Reeves acknowledged “not everyone has been able to get exactly what they want” following Cabinet squabbling over departmental budgets.
She said “every penny” of the spending increases had been funded through the tax and borrowing changes she had announced in her first budget.
The Chancellor also insisted she would not need to mount another tax raid to pay for her plans, but experts warned the money for the NHS might still not be enough and the Government is under international pressure to boost defence funding further.
Paul Johnson, of the Institute for Fiscal Studies, described the hospital waiting times target as “enormously ambitious”, adding: “And on defence, it’s entirely possible that an increase in the Nato spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard.”
At a summit later this month Nato members will consider calls to increase spending to 3.5% on defence, with a future 1.5% on defence-related measures.
Steven Millard, interim director of the NIESR economic research institute, said the Chancellor’s non-negotiable fiscal rules, coupled with the “small amount of headroom” in her spending plans, meant “it is now almost inevitable that if she is to keep to her fiscal rules, she will have to raise taxes in the autumn budget”.
Elsewhere, policing leaders warned forces may need to make deep cuts after their settlement was announced.
The spending review provides more than £2 billion for forces, but ministers have acknowledged some of that “spending power” will come from council tax hikes.
