DHSC told to explain claim that £1.8bn NHS funding boost is 'new money'

Written by Beckie Smith on 30 September 2019 in News
News

Stats watchdog says department has failed to answer questions about how the pledge will be funded

Photo: Stefan Rousseau/PA Wire

The UK’s statistics watchdog has said the Department of Health and Social Care must explain how the prime minister’s £1.8bn spending boost for the NHS is being funded.

The pledge was one of Boris Johnson’s first spending commitments after he was appointed prime minister in July. A DHSC press release announcing the funding last month said it was “new money” coming from the Treasury, which would be used to upgrade NHS facilities at 20 hospitals and capital spending across several trusts.

But it later emerged that at least half of the total was not new money, as around £1bn committed to capital expenditure would in fact come from cash reserves that hospitals had already earned by making efficiencies. DHSC had previously blocked trusts from spending the money over concerns it could lead to the department breaching its capital spending limits, experts said.


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NHS chief financial officer Julian Kelly later said in a letter to NHS trusts that the £1bn increase in DHSC’s baseline capital expenditure limit would enable them to revert to earlier capital spending plans that they had been unable to implement because of the department’s earlier block onu sing their reserves.

Ed Humpherson, head of the Office for Statistics Regulation, has now said that although there has been a “significant level of debate” as to whether the £1bn increase in capital expenditure should be considered new money. “However, further statements and responses from the Department of Health and Social Care do not seem to have fully answered these questions.”

In a letter to Mark Svenson, head of the statistics profession at DHSC, Humpherson said the watchdog has so far been “unable to identify an authoritative official statement describing how the £1.8bn is funded, and the mechanisms that led the £1bn capital expenditure to be withheld and then subsequently released to trusts”.

“I am sure that you will agree that the relative complexity of the funding structures underpinning this announcement need to be carefully explained,” Humpherson said.

He added: “I encourage DHSC to release such a statement as soon as possible in order to enhance transparency and support public understanding.”

Humperson’s letter to Svenson came as a fresh announcement of funding for the NHS by the prime minister attracted controversy. This weekend Johnson said the government would spend £13bn on building 40 new hospitals over the next decade in what he billed as the "the biggest hospital building programme in a generation".

However, further scrutiny of the pledge revealed that the government has so far committed only £2.7bn for building projects to just six hospital trusts over the next five years. The six projects are not all for entirely new hospitals, as some are to refurbish or extend existing buildings.

Health secretary Matt Hancock said yesterday that only £100m of “seed funding” had been committed to the remaining 34 proposed projects. “The rest of the money will come in the future,” he said.

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Beckie Smith
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Beckie Smith is a reporter for CSW who tweets @Beckie__Smith.

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