Spending Review Phase 2 : submission to Her Majesty's Treasury
Key points
Health drives economic growth. Every £1 in health spending correlates with £4 in economic activity, rising to £14 in economic activity for every £1 spent on primary and community care.
To boost productivity and deliver best value, the existing capital regime should be overhauled. This should include streamlining the levels of approvals for business cases and simplifying Strategic Outline Case requirements.
HM Treasury should commit to a new model of private investment in capital to help bridge the funding gap and boost productivity. The government’s forthcoming 10-year infrastructure strategy provides the perfect opportunity to introduce new solutions.
NHS leaders welcome the £22.6bn additional health revenue spending committed at October 2024 Budget and are working hard to deliver best value for money and boost efficiency. The 4 per cent efficiency savings required of NHS providers in 2025/26, set out in planning guidance, is historically difficult.
To boost NHS productivity to 2% per year, at least an additional £3.3bn capital spending is required over the next 3 years. The £3.1bn extra announced at the October 2025 Budget was £3.3bn short of the £6.4bn NHS leaders calculate is needed for 2% productivity growth.
Investing in our health and care services is critical to delivering the government's Growth Mission. Health drives economic growth. Every £1 in health spending correlates with £4 in economic activity, rising to £14 in economic activity for every £1 spent on primary and community care.
Reform is essential to putting the NHS on a financially sustainable footing. Local leaders back the government’s reform agenda and are working hard to support and implement it through engagement with the 10-year health plan process.
Overhauling the NHS capital regime is critical to boosting productivity and deliver best value. This should include streamlining the levels of approvals for business cases including a departmental approval committee and simplifying Strategic Outline Case requirements. The NHS Confederation has set out proposals for reforming the NHS capital regime to achieve best value from existing spend.
HM Treasury should commit to a new model of private investment in capital to help bridge the funding gap and boost productivity. The NHS Confederation has already set out options for raising NHS capital funds and will publish further detail on a potential new private investment model ahead of the Spending Review. The Government’s forthcoming 10-year infrastructure strategy provides the perfect opportunity to introduce new solutions.
NHS leaders welcomed the £22.6bn additional health revenue spending committed at October 2024 Budget and are working hard to deliver best value for money and boost efficiency. The 4 per cent efficiency savings required of NHS providers in 2025/26, set out in planning guidance, is historically difficult. It is almost double last year’s 2.2 per cent and more than four times the NHS’s historical rate of productivity growth at 0.9 per cent.
Further capital investment and reconfiguring local services are key to unlocking productivity and better value from existing revenue spend. The NHS Confederation is calling on government to put these two principles at the centre of their Spending Review.
