Yesterday’s Spending Review featured a timely and significant increase in government spending on Britain’s healthcare system, with a 2.8% average annual increase in funding for the Department of Health and Social Care (DHSC) over the next three years and a 3% rise in NHS England’s day-to-day funding. With a Chancellor committed to fiscal restraint, the funding boost is an important moment for the DHSC and Health Secretary – a settlement that exceeds most other government departments and signals the importance of improving access and the quality of healthcare to the Government’s political project. 

Nevertheless, while the headline numbers appear generous, a deeper dive reveals a more complex and constrained reality. The settlement falls short of the historical average NHS funding increase of 3.6% and well below the 4% annual uplift that independent experts, including the Health Foundation, have long argued is necessary to restore services after a decade of funding constraints. 

This settlement must now fund an expansive list of government healthcare pledges - from cutting elective waits and improving ambulance times, to expanding GP access, and improving mental health support. Add to this the rising costs of medicines, energy, and staff pay deals, and much of the new funding risks being absorbed before a single service is expanded. 

The Government’s continued focus on the three strategic shifts outlined in the forthcoming 10-Year Health Plan (greater prevention, shifting care into the community, and digital transformation) is welcome. The announcement of up to £10 billion in digital investment by 2028/29, including a single patient record and further development of the NHS App, should also support the health service to digitise and improve patient contact and care. However, capital budgets remain flat in real terms, raising serious concerns about the NHS’s ability to modernise facilities, address the £14 billion maintenance backlog, and deliver new infrastructure to support community-based care. Transformation of this scale requires not just funding, but clarity, leadership and the infrastructure to deliver, none of which are guaranteed during a period of reorganisation and cost-cutting. 

Mental health and social care also featured, although unevenly. Promises to expand mental health teams to all schools and grow the mental health workforce are welcome, but the pace (stretching to 2029–30) is far from urgent. In social care, a proposed Fair Pay Agreement is a potentially transformative step toward professionalising and stabilising the workforce. But questions remain about funding - how much will it cost, and will it come out of the already limited uplift for the sector? Without sufficient resourcing, other critical improvements to the sector risk being deprioritised. 

While additional funding is undoubtedly welcome, the most critical moment for the NHS in this Parliament is likely to come next month, with the launch of the 10-Year Health Plan. The Health Secretary must ensure that this spending settlement is translated into a credible and deliverable vision for the future of health and social care. That includes difficult decisions on service redesign (especially as ICB’s face 50% cuts to operating costs), greater clarity on workforce investment, and the political will to support a sustained shift in care closer to people’s homes. Only then will the Government have delivered on its pledges to improve Britain’s healthcare system and restore public confidence in a system under sustained strain.