Budget funding for the NHS

Increases will be tempered by low productivity growth The government announced £41bn of tax rises in the October 2024 budget, which, according to the Resolution Foundation think tank, takes tax as a share of national income to a post-war record high.1 Post-pandemic, the UK is moving towards a level of taxation closer to that in other high income countries,2 but it remains to be seen if this can improve the quality of public services sufficiently. NHS England’s funding will increase by an average of 3% a year in real terms between 2023-24 and 2025-26 after pension policy changes are taken into account. This is significantly higher than the 2.1% a year increases in the five years before the pandemic. The NHS continues to take the lion’s share of additional public service spending. In 2025-26 public service spending will be 17% higher than in 2018-19, but NHS spending is up by 30%. Satisfaction with the NHS is at an all-time low,3 however, and a stronger economy and a stronger NHS are far from guaranteed. Since the 2008 financial crisis, the UK has been stuck with sclerotic productivity growth—a measure of the economy’s ability to use available inputs (eg, buildings, machines, software, labour force) to generate …