The NHS will receive increased funding of £20.5 billion per year

The NHS will receive increased funding of £20.5bn in real terms per year by the end of the 5 years compared to today – an average 3.4% per year overall – in a move to secure the future of the health service as it approaches its 70th birthday, the Prime Minister announced today.

The increase will mean the NHS can regain core performance and lay the foundations for service improvements. The funding will be front-loaded with increases of 3.6% in the first 2 years, which means £4.1 billion extra next year.

This long-term funding commitment means the NHS has the financial security to develop a 10-year plan. The plan will be developed by the NHS, working closely with government and be published later this year. The priorities include:

• getting back on the path to delivering agreed performance standards – locking in and further building on the recent progress made in the safety and quality of care

• transforming cancer care so that patient outcomes move towards the very best in Europe

• better access to mental health services, to help achieve the government’s commitment to parity of esteem between mental and physical health

• better integration of health and social care, so that care does not suffer when patients are moved between systems

• focusing on the prevention of ill-health, so people live longer, healthier lives

It will be essential that every pound in the NHS budget is spent wisely. The government will set the NHS 5 financial tests to show how the NHS will do its part to put the service onto a more sustainable footing:

• improving productivity and efficiency

• eliminating provider deficits

• reducing unwarranted variation in the system so people get the consistently high standards of care wherever they live

• getting much better at managing demand effectively

• making better use of capital investment