NHS spending: Inflation and demand growth to wipe out almost all new funding

Published

3 years ago

November 18, 2022

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Nearly all of the new NHS funding announced by the chancellor will be eaten up by the costs of inflation and growing demand, with just £800m left over for the improvement of services.

In his autumn statement, Jeremy Hunt promised an additional £3.3bn in funding for the NHS for each of the next two years.

Analysis by the Nuffield Trust, shared exclusively with Sky News, suggests that rising prices and growing demand will use up three quarters of next year’s increase, and the entirety of the increase scheduled for 2024/25.

Half of the total funding boost is likely to be eaten up by inflation, as the UK endures a second year of rising prices. A Sky News analysis found that energy price increases added £121m to the running cost of NHS buildings in the year to March.

Inflation is expected to cost the health service £3.2bn over the next two years, while increased demand from a growing and ageing population is expected to cost the NHS a further £852m next year and £1.7bn the year after.

That leaves just £795m left over for improving services next year, a quarter of the £3.3bn headline funding boost.

The increase scheduled for 2024/25, meanwhile, is set to be entirely taken up in dealing with the pressures of inflation and growing demand.

John Appleby, chief economist at the Nuffield Trust, said that the final amount “could be higher or lower”, depending on whether trusts overspend and whether certain key costs, like nurses’ pay, increase faster than expected.

Nurses are set to go on strike next month over the government’s decision not to raise their pay in line with inflation.

Rising energy costs are already putting NHS England’s finances under strain. Sky News analysis of data from NHS Digital found that an 18% rise in fuel prices added £121m to the running costs of the health service’s buildings in the year to March.

Many NHS trusts expect costs to rise further. A recent report by the British Medical Journal found that some trusts were budgeting for an additional £2m per month in fuel costs next year.

Nottingham University Hospitals NHS Trust confirmed to Sky News that it expects its annual energy bills to more than triple in 2023, adding £24m to its running costs.

It’s not just energy prices that are rising. The increased costs of hiring cleaners, for instance, has added £76m to the health service’s expenses over the past year, while higher costs for providing inpatient meals has added a further £38m.

Matthew Taylor, chief executive of NHS Providers, told Sky News that the new money promised by the chancellor would allow the NHS to “just about keep the show on the road”.

“It will enable us to continue to manage a very difficult situation, and hopefully make further progress in areas like waiting lists.

“What it won’t do is address the fundamental issues and get the NHS to where the public would like it to be.”

More than 7 million people in England are currently waiting for treatment. That’s nearly one in eight of the population, and the number has been rising for 28 consecutive months.

The number of people waiting more than four hours at A&E is also at record levels, while ambulance response times are far above target.

David Maguire, senior analyst at the King’s Fund, told Sky News that local NHS trusts were likely to face “really, really tough decisions” about where to focus their resources in the coming years.

“You always have to prioritise emergency and urgent care. That might mean less focus on goals like improving productivity or investing in preventative care. We’re already seeing a pull back at the NHS England-level on some of the funding for transformation efforts, for example around digital technology and data usage.”

This wouldn’t be the first time the NHS has cut back on long-term investments in order to free up resources for frontline services.

Between 2014 and 2019, £4.3bn earmarked for capital investment was instead used to fund day-to-day spending.

That decision has left the NHS with a backlog of maintenance work worth £10.2bn – equivalent to 92% of the entire annual cost of running the NHS estates.

Nearly a fifth of that backlog (£1.8bn worth) is classified as “high risk”, meaning it could result in “catastrophic failure, major disruption to clinical services or deficiencies in safety liable to cause serious injury or prosecution”.

“We’ve got some hospitals which are currently being held up by struts,” said Mr Taylor.

“That’s not what you want people to be doing – lying in a hospital bed looking at a temporary strut holding up the roof. These hospitals aren’t currently dangerous, but in time they will become dangerous and this needs to be addressed.”

Dealing with the maintenance backlog is increasingly hampering the ability of trusts to invest in improving services. Last year, the NHS spent £1.4bn dealing with the maintenance backlog, 16% of its entire capital budget.

And that capital budget is already low by international standards. In the decade before the pandemic, OECD data shows, the UK’s long-term investments in the healthcare sector amounted to just 0.25% of GDP – compared to 0.38% in France and 0.69% in the US.

Reducing the waiting list

In order to reduce the number of patients waiting for treatment, NHS England set a target in February of returning NHS activity to pre-pandemic levels by early 2022-23, and increasing activity a further 29% within two years.

Thousands of additional staff have been hired in recent years, but the impact of COVID-19 and the demand of the target means that the NHS is still short of staff.

Trusts are increasingly hiring expensive agency workers to fill the gaps, adding further pressure to the budget.

Spending on agency workers reached £3bn in the year to March, up from £2.4bn two years earlier.

Hours before the chancellor’s statement on Thursday, the National Audit Office said the NHS was unlikely to meet its activity targets, pointing to the impact of inflation, staff shortages and productivity issues.

Despite a 13% increase in the number of clinical staff since 2018, the number of people being removed from the NHS waiting list each month has risen by just 2%.

NHS chief executive Amanda Pritchard said the chancellor’s decision to increase funding for the health service showed that “the government has been serious about its commitment to prioritise the NHS”.

“While I am under no illusions that NHS staff face very testing times ahead, particularly over winter, this settlement should provide sufficient funding for the NHS to fulfil its key priorities,” she said.

UK

Resident doctor strikes: I don’t want people to suffer but we have to walk out again, says BMA chief

Published

8 hours ago

November 13, 2025

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Resident doctor strikes: I don't want people to suffer but we have to walk out again, says BMA chief

The British Medical Association (BMA) has defended a new round of resident doctor walkouts starting on Friday, insisting medics’ pay is still “way down” compared with 2008 and that the government has failed to finish “a journey” towards restoring it.

BMA chair Dr Tom Dolphin told Sky News the dispute remains rooted in years of pay erosion that have left resident doctors far behind other public sector workers.

“When we started the dispute, […] the lowest level of the resident doctors were being paid £14 an hour,” he said.

“There were some pay rises over the last couple of years that brought that partly back to the value it should be at, but not all the way.

“The secretary of state (Wes Streeting) himself called it a journey, implying there were further steps to come, but we haven’t seen that.”

When asked if the row ultimately “comes down to money”, he replied: “In the sense that the secretary of state doesn’t want to or isn’t able to fund the pay increases to match the value that we had in 2008.”

Dr Dolphin argued that while “the general worker in the economy as a whole” has seen pay catch up since the 2008 financial crash, “doctors are still way down”.

The government points out that its 29% settlement last year was one of the largest in the public sector and was intended to draw a line under two years of walkouts.

How much do resident doctors earn?

After the most recent pay awards, in 2025/26 a medic just out of university receives a basic salary of £38,831 and has estimated average earnings of £45,900 after factors like extra pay for unsociable hours are taken into account, according to medical think tank the Nuffield Trust.

That average figure rises to £54,400 by the second year and a more senior speciality registrar earns an average of £80,500.

The BMA says that when the dispute started, the most junior doctors were making around £14 per hour. That works out at £29,120 per year for a 40-hour week.

That’s very close to the earnings of a doctor fresh out of medical school in 2022/23 – £29,384, according to Full Fact.

But that’s over a 52-week year without taking into account paid holiday or unsociable hours.

But Dr Dolphin said the deal still fell short: “The gap was biggest for doctors and needed the biggest amount of restoration, and that’s what we got.”

He defended the BMA’s use of the Retail Price Index (RPI), a metric rejected by the Office for National Statistics, saying it “better reflects the costs people face”.

Should resident doctors get a pay rise? Have your say in the poll at the bottom of this story.

‘Who do you think is treating the patients?’

With Chancellor Rachel Reeves preparing her budget amid warnings of deep cuts, Dr Dolphin said the BMA is not demanding an immediate cash injection.

“We’re quite happy for that money to be deferred with some kind of multi-year pay deal so that we can end the dispute and avoid having further industrial action about pay for several years to come,” he said.

“Money spent in the NHS is returned to the economy. For every pound you spend, you get several pounds back.”

When pressed on whether the £1.7bn cost of previous strike action could have been better spent on treatment and technology for NHS cancer patients, he hit back: “Who do you think is treating the cancer patients? It’s the doctors.”

Strikes will cause disruption, union boss admits

Dr Dolphin rejected suggestions that the dispute could destabilise the government, calling the idea “implausible”.

He admitted prolonged strikes have tested public patience, but said the government had left doctors with no choice.

“A prolonged industrial dispute makes people annoyed with both sides,” he said. “It is vexing to us that we are still in this dispute.”

“I don’t want patients to suffer,” he added. “I accept that the strikes cause disruption… of course that’s upsetting for them. I completely get that. And I’m sorry that it’s happening.”

UK

PM apologises to health secretary over coup accusations

Published

8 hours ago

November 13, 2025

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PM apologises to health secretary over coup accusations

Sir Keir Starmer has apologised to his health secretary after allies of the prime minister accused him of plotting a coup.

Sky News understands Sir Keir spoke briefly to Wes Streeting on Wednesday evening, though did not share details about the briefing campaign.

Politics Hub: Follow latest updates

Speaking at Prime Minister’s Questions earlier in the day, he denied authorising the attacks on Mr Streeting, who was accused of planning a leadership challenge after the budget later this month.

Mr Streeting said the allegations are “not true”, telling Sky News’ Mornings With Ridge And Frost that whoever was behind the briefings had been “watching too much Celebrity Traitors”.

He insisted he was loyal to the prime minister, who has been under mounting pressure as he and the Labour Party flounder behind Reform in the polls.

Downing Street went on the attack on Tuesday night to ward off any potential challenge to Sir Keir after the budget, which could see the government announce manifesto-breaking tax rises.

Sir Keir and Rachel Reeves have refused to rule out raising income tax, national insurance, or VAT.

One senior figure told Sky News political editor Beth Rigby while a post-budget challenge is unlikely, it could come if next May’s elections – including in London and Wales – go badly for Labour.

Labour face a challenge from Reform on the right and parties like the Greens and Plaid Cymru on the left.

Also under pressure is the prime minister’s chief of staff, Morgan McSweeney, after Mr Streeting hit out at a “toxic culture” inside Number 10.

Sir Keir failed to say he had “full confidence” in him at PMQs in response to questions from Kemi Badenoch, but the prime minister’s political spokesperson later insisted to journalists that he does retain his backing.

Sky News understands Mr McSweeney was not discussed when Sir Keir and Mr Streeting spoke last night.

Labour chairwoman Anna Turley said the prime minister will investigate the source of the claims against the health secretary, telling ITV: “This is not what he wants to see and he’s determined to drive it out.”

UK

Epstein said Andrew did have photo taken with Virginia Giuffre, emails show

Published

11 hours ago

November 13, 2025

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Epstein said Andrew did have photo taken with Virginia Giuffre, emails show

Newly released emails from Jeffrey Epstein include one in which the late paedophile financier describes how Andrew Mountbatten-Windsor did have his photo taken with victim Virginia Giuffre.

The former duke, who was recently stripped of his titles, has previously said he didn’t recall meeting Ms Giuffre and claimed an image of the pair could have been doctored.

Ms Giuffre, who took her own life earlier this year, claimed in her recently released autobiography that – as a teenager – she had sex with Andrew on three occasions after being trafficked by Epstein and Ghislaine Maxwell.

Andrew has always strongly denied the claims.

Trump latest: 20,000 pages from Epstein files released

The details have emerged after thousands of files from the Jeffrey Epstein estate were released by Republicans on the House Oversight Committee.

The email that discusses the photograph was one of those released and features an exchange with a journalist in 2011.

A picture emerged in 2011 of Andrew, which has become infamous, showing the former prince with his arm around Virginia Giuffre, apparently taken in Ghislaine Maxwell’s London home.

Although the name of the “girl” is redacted, Epstein appears in his email exchange to be referring to Ms Giuffre, who at the time had spoken to The Mail on Sunday, which had published the photo and her account of encountering Andrew while travelling with Epstein. After cutting ties with Epstein, she moved to Australia. She also changed her surname from Roberts to Giuffre.

An email from Epstein to the journalist read: “The girl has fled the country with an outstanding arrest warrant. The da (sic) after she accused others, said in writing that she has no credibility, she was never 15 years old working for me, her story made it seem like she first worked for trump at that age and was met by ghislaine maxwell.

“Total horseshit, the daily mail paid her money, they admitted it, with the statement that it took money to coax out the truth.

“Yes she was on my plane, and yes she had her picture taken with Andrew, as many of my employees have.

“I have never misled you, this girl is a total liar, they (sic) authorities should check her australian immigration form… I will ask if they will cooperate – Prince people.”

In a different email exchange in March 2011 about an inquiry from a news reporter, Epstein messages someone listed as “The Duke”, which is thought to be Andrew.

Epstein told him: “Im not sure how to respond, the only person she didn’t have sex with was Elvis.”

It prompted the following response: “Please make sure that every statement or legal letter states clearly that I am NOT involved and that I knew and know NOTHING about any of these allegations.

“I can’t take any more of this my end.”

It is not clear if Epstein, who killed himself in 2019 while awaiting trial on sex-trafficking charges, was writing about Ms Giuffre.

Epstein: ‘She is a fraud’

In a separate email to a publicist in July 2011, Epstein writes: “The girl who accused Prince Andrew can also easily be proven to be a liar.

“I think Buckingham Palace would love it. You should task someone to investigate the girl Virginia Roberts, that has caused the Queen’s son all this agro (sic).

“I promise you she is a fraud. You and I will be able to go to ascot (sic) for the rest of our lives.”

Speaking to Newsnight in 2019, Andrew said: “I have absolutely no memory of that photograph ever being taken… you can’t prove whether or not that photograph is faked or not…

“That’s me but whether that’s my hand or whether that’s the position I… but I don’t… I have simply no recollection of the photograph ever being taken.”