On Wednesday 5 March 2025, the House of Commons will consider estimates of spending of the Department of Health and Social Care as part of the Estimates Day debate.
Estimates Day debate: The spending of the Department of Health and Social Care (295 KB , PDF)
On Wednesday 5 March 2025 there will be an Estimates Day Debate on the spending of the Department for Health and Social Care. The topic for the debate was proposed by the Backbench Business Committee on application from Sir Geoffrey Clifton-Brown MP, Chair of the Public Accounts Committee, and Layla Moran MP, Chair of the Health and Social Care Committee.
The Department of Health and Social Care’s (DHSC)’s day-to-day spending (resource DEL) is set to increase by £10,854.9 million (+5.8%), from £187,636.2 million at the Main Estimate to £198,491.1 million at the Supplementary Estimate.
DHSC’s resource DEL at the Supplementary Estimate exceeds its resource DEL budget set in phase 1 of the current Spending Review (announced with the Autumn Budget in October 2024) by £1.7 billion. This means that the government is now forecasting that DHSC will spend more in 2024/25 than had been forecast at the Autumn Budget. The £1.7 billion is the combined effect of the reserve claim and net inward budgetary transfers from other government departments, as referred to above.
DHSC’s investment spending (capital DEL) is set to decrease by £1,011.4 million (-8%), from £12,655.7 million at the Main Estimate to £11,644.4 million at the Supplementary Estimate. In the 2023-24 supplementary estimate, £907 million was transferred from capital DEL to resource DEL. And in the 2022-23 supplementary estimate, £390 million was transferred in the same direction. According to Lord Darzi’s Independent Investigation of the National Health Service in England, a further £4.3 billion was ‘raided’ from DHSC’s capital budgets to fund day-to-day spending between 2014-15 and 2018-19.
DHSC’s resource AME budget is set to decrease by £2,100 million (-19.3%), from £10,880 million at the Main Estimate to £8,780 million at the Supplementary Estimate. DHSC’s capital AME budget is set to decrease by £129.6 million (-13.8%), from £942.6 million to £813 million. The budget was set at the Main Estimate to cover interim payments to living infected beneficiaries currently registered with existing Infected Blood Support Schemes. Updated forecast payments are lower than forecast at the Main Estimate. Budget for future payments by the Infected Blood Compensation Authority, which was established in May 2024, is included in the Cabinet Office’s supplementary estimate for 2024-25.
In the Autumn Budget 2024 the Government committed to providing an additional £25.6 billion for the Department of Health and Social Care (DHSC) in 2025/26, compared to 2023/24 outturn.
Around £22.6 billion represent an increase to resource spending and around £3.0 million for additional capital expenditure.
When adjusted for the impact of inflation, the additional real terms expenditure in 2025/26 is around £16.7 billion more than in 2023/24 – an extra £13.7 billion in resource and £2.5 billion in capital expenditure.
The table below provides a time series over the past decade of DHSC expenditure in cash and real terms. Over this period, total and resource spending saw the largest annual real terms increase in 2022/23. The largest annual real terms increase in capital expenditure was observed in 2020/21.
Notes: a) This series excludes the £80 billion of additional Covid-19 related funding allocated between 2020 and 2022.
Sources: HM Treasury Public Expenditure Statistical Analyses, Tables 1.5, 1.8 and 1.10 (various years); Autumn Statement 2022, Table 2.1 and 2.2; Spring Budget 2024, Table 2.1 and 2.2 and Autumn Budget 2024, Table 1.9 and 1.10
The latest DHSC annual report and accounts show that in 2023/24, Integrated Care Boards and NHS providers, collectively “NHS systems”, reported a year-end overspend of £1.4 billion.
The National Audit Office report that NHS England (NHSE) received additional funding to counteract the pressures faced by NHS systems:
…NHSE received extra funding from the government during 2023-24, including £1.7 billion to support pay deals for non-medical staff and £1.7 billion to mitigate the impact of industrial action. NHSE also reduced planned spending against its own central budget in 2023-24 by £1.7 billion. These actions did not prevent NHS systems’ deficits increasing beyond what was planned at the beginning of the year. NHSE also received an additional £1.1 billion from government in 2023-24 specifically to address the costs of new pay agreements for doctors and dentists (page 7).
NHSE has calculated that after receiving additional funding from the government and re-allocating central funding, it underspent against its overall budget by an estimated £30 million in 2023/24.
Most of the DHSC’s budget goes towards NHS England to pay for day-to-day running costs. There are various pressures on the day-to-day running costs of NHS, including:
Various stakeholders have raised concerns about strains on finances within the NHS and its financial sustainability in the future.
In July 2024, Wes Streeting, Secretary of State for Health and Social Care, commissioned Lord Darzi to carry out an independent investigation into the NHS in England. The final report of the investigation (‘the Darzi report’) was published in September 2024. The report discussed various aspects of the financial situation of the NHS. It said:
The report recommended re-directing funding to grow GP, community and mental health services. The report also said innovation, better operational management, capital investment in modern buildings, “re-engaging and empowering staff” and technology could help the NHS to become more productive.
In its 2025/26 priorities and operational planning guidance, published on 30 January 2025, the government highlighted the tight financial situation of the NHS. It said to deal with demand growth, NHS organisations “will need to reduce their cost base by at least 1% and achieve 4% improvement in productivity”. It also highlighted transferring “higher proportions of funding” directly to local systems and minimising ringfencing so local leaders can more flexibly plan efficient services. The guidance said “all parts of the NHS must now live within their means”.
The Committee of Public Accounts published its report on NHS financial stability in January 2025.
The committee took oral evidence from NHSE, DHSC and His Majesty’s Treasury (HMT) officials in November 2024. It did so on the basis of a report published by Gareth Davies, Comptroller and Auditor General at the NAO; NHS Financial Management and Sustainability, July 2024. In the report, the NAO expressed concern that “the NHS may be working at the limits of a system which might break before it is again able to provide patients with care that meets standards for timeliness and accessibility”.
Below, we have provided an overview of the conclusions and recommendations made by the committee that relate to NHS finances (4 out of 7 made by the committee):
On 29 January 2025, Amanda Pritchard, Chief Executive Officer, Julian Kelly, Deputy Chief Executive and Chief Financial Officer, and Duncan Burton, Chief Nursing Officer for England, gave oral evidence to the Health and Social Care Committee on behalf of NHS England (NHSE). Amanda Pritchard has since set out an intention to step down from her role as Chief Executive in March 2025.
The committee questioned the officials on the content of the report published by the Committee of Public Accounts on NHS financial stability. Following the evidence session, Layla Moran, Chair of the Health and Social Committee expressed disappointment about the manner in which the NHSE officials had provided evidence to the committee.
Estimates Day debate: The spending of the Department of Health and Social Care (295 KB , PDF)
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