Chancellor Jeremy Hunt’s Spring Budget has given the NHS a funding boost as part of an investment package for better public services, labelled a ‘Budget for Long Term Growth’ by the Treasury.
The NHS in England will receive a £2.5 billion day-to-day funding boost for 2024/25 and £3.4 billion in capital investment over the forecast period to help unlock £35 billion in productivity savings over the next Parliament by harnessing new technology like AI and cutting admin workloads - part of landmark Public Sector Productivity Plan to deliver better public services.
The Chancellor’s landmark Public Sector Productivity Plan marks the first step towards returning public sector productivity back to pre-pandemic levels and will ensure taxpayers’ money is spent as efficiently as possible. OBR analysis suggests that raising public sector productivity by just 5% would deliver up to £20 billion of benefits a year.
Backed by £4.2 billion in funding, the plan will allow public services to invest in new technologies like AI, replace outdated IT systems, free up frontline workers from time-consuming admin tasks and take action to reduce costs down the line. The NHS will receive £3.4 billion as part of this over the forecast period - doubling investment in digital transformation, significantly reducing the 13 million hours lost by doctors every year because of old IT and delivering test results faster for 130,000 patients a year thanks to AI-fitted MRI scanners that help doctors read results more quickly and accurately. Further changes will include making the NHS app a single front door for patients and rolling out universal electronic patient records.
This means the NHS can commit to raising productivity to 2% on average by 2028-29, at the upper end of the 1.5-2% ambition in the Long Term Workforce Plan – delivering a health service fit for the future. The NHS also gets a £2.5 billion funding boost for 2024/25.
This investment, which comes alongside an extra £2.5 billion cash injection for 2024/25 to support the NHS improve performance and reduce waiting times, means the NHS can commit to delivering £35 billion in productivity savings over the next Parliament, while the £800 million to boost productivity across other public services will deliver an extra £1.8 billion in productivity benefits by 2029.
