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2004 SPENDING REVIEW

PN A2

12 July 2004

RECORD HEALTH FUNDING MEANS SHORTER WAITS, MORE CHOICE AND BETTER CARE AND ADVICE

Patients will continue to benefit from increased investment in the health service, as the Chancellor today reaffirmed the historic funding increase for the NHS of 7.2% increases per year above inflation until 2007/08. Social Services will receive 2.7% increases above inflation for the three years up to 2007/08 to support more older people to live in their own homes.

The Chief Secretary to the Treasury, Paul Boateng, said:

“Through our record increases for the NHS, we have seen patients benefit from shorter waiting times, more doctors and nurses, better medicines, and new hospitals. This settlement will allow us to continue to move the NHS from being simply a sickness service to being a world class health service, free for all, personal to each.”

The Secretary of State for Health, Dr. John Reid, said:

“This historic increase in resources allows us to maintain an NHS – the best insurance policy in the world – free at the point of use, but increasingly personal and responsive to the needs of individual patients. By 2008, the maximum wait for hospital treatment will have fallen from 18 months to 18 weeks and patients will have more choice and control over their care than ever before.

Extra resources will help people to lead longer, healthier lives, through an increased commitment to tackle public health problems and to support the 17.5m people with chronic conditions such as asthma and diabetes. Health and social care will work better together to prevent avoidable hospital admissions and support larger numbers of older people to live in their own home. This is a national health service to meet the expectations of all for the 21st century.”

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DETAILS

  • Health spending will rise 7.2% per year in real terms between 2002/03 and 2007/08, an extra £36bn per year for the NHS by 2007/08. There will be a 2.7% real terms increase for personal social services.
  • This builds on progress made since 1997, which has seen nearly 40,000 fewer deaths each year from cancer and heart disease, maximum waiting times for surgery halved and shorter waits to see a GP and in A&E, more services available at home and in the community rather than in hospital, 19,300 more doctors and 67,500 more nurses, more beds, and the biggest NHS hospital building programme in history.
  • The funding through to 2007-08 will ensure:
    • shorter waiting times – there will be more operations and medical staff so that patients will spend less time waiting for health care at all stages of treatment. By 2008, no-one will wait more than 18 weeks between booking their hospital appointment and receiving hospital treatment.
    • longer healthier lives – the forthcoming White Paper on improving health will help people lead longer, healthier lives, with more support for the 69% of smokers who want to quit, and a massive investment in better primary care, with more services available in the community.
    • the NHS becomes a true health service, not just a sickness service - with more drugs, treatment, support and advice for the 17.5m people with chronic conditions, such as diabetes and asthma, to better help them manage their conditions. Health and social care will work together to prevent avoidable hospital admissions. Patients will be able to monitor their own care in their own electronic patient record.
    • a personal health service with more patient choice – The NHS will remain free at the point of use, but personal to each patient. By 2008 all patients needing secondary care will be able to choose the hospital they wish to provide it, subject to the provider meeting cost and quality standards. 
    • more frontline staff and more capacity - more doctors, nurses and other health professionals, to offer more services and better patient care. The biggest hospital building programme in the history of the NHS will provide better comfort, better clinical facilities and greater capacity.
    • greater numbers of older people will be supported to live at home – a  new preventative technology grant will provide £80m over two years to fund local councils to provide alarm technology to 160,000 vulnerable elderly, helping to keep them safe and out of hospital. New pilot projects will be funded to encourage innovative joined-up preventative services for the elderly across the NHS and social care.
    • improvements in efficiency – there will be a war on waste, releasing around £6.5bn for better patient care by 2007/08, through, for example:
      o electronic patient records which will mean fewer missing records and better patient care;
      o better exploiting the NHS’ national buying power;
      o shared back office functions (such as IT and finance); and
      o cutting the running costs of health bureaucracy.
 Department of Health

     £ million   
   2004-05   2005-06   2006-07   2007-08  
 National Health Service (England)          
 Resource Budget   66,531   72,668   79,366   86,796  
 Capital Budget   3,383   4,363   5,163   6,133  
 Total NHS (England)1    69,369   76,384   83,818   92,143  
           
 Personal Social Services England              
 Funded by the department   1,953   1,967   [2,037]   [2,097]  
 Local Authority PSS SSA   8,690   9,553   [9,933]   [10,373]  
 Total PSS (England)1   10,643   11,520   [11,970]   [12,470]  
           
 Food Standards Agency              
 Resource Budget   139   143   143   143  
 Capital Budget   1  1  1  1  
 Total Food Standards Agency (England)1    138  142  142  142  
Total Resource Budget (DH & FSA)  68,552  74,707  81,455  88,925
 Total Capital Budget (DH & FSA)   3,465   4,444   5,264   6,254  
Total Departmental Expenditure Limit1 (DH & FSA)  71,460  78,492  85,996   94,381
 Near-cash spending in DEL (DH & FSA)  69,315  76,035  83,410 91,590  
1 Full resource budgeting basis, net of depreciation (NHS 545/647/71/786, PSS 10/10/10/10 FSA 2/2/2/2)

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NOTES FOR EDITORS

1. The Public Service agreement between the Treasury and the Department of Health (which can be seen on  this website ) lays out the strategic objectives that the NHS and social services will deliver in return for the resources they receive, falling into four groups:
a. helping people live longer, healthier lives (with targets to reduce premature deaths from cancer and heart disease, reduce smoking rates, childhood obesity and teenage pregnancy and reduce health inequalities);
b. improved care for patients with chronic conditions;
c. shorter waiting times for surgery and maintaining progress with shorter waits for primary care and in A&E; and
d. higher patient satisfaction and better care for the elderly, with more older people supported to live in their own homes.

2. For media enquiries, please call HM Treasury press office on 020 7270 5283.

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2004 Spending Review index