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NHS Funding Act 2020

Contents

Policy background

The role of the Department of Health and Social Care in NHS funding

  1. NHS England (NHSE) receives its funding from the Department of Health and Social Care (DHSC). Under section 13A of the National Health Service Act 2006 (the "2006 Act"), the Secretary of State must publish and lay before Parliament a "Mandate" before the start of each financial year.
  2. Under section 223D of the 2006 Act, the Secretary of State must set limits on the total capital and revenue resource use of NHSE (which includes capital and revenue resource for use of Clinical Commissioning Groups (CCGs)) for each financial year. These limits must be specified in the mandate. NHSE is under a duty to ensure that its and CCGs’ revenue and capital resource use does not exceed these limits (section 223D(2) and (3) of the 2006 Act). The Secretary of State may also specify such limits for subsequent financial years (section 13A(4) of the 2006 Act).

The role of Her Majesty’s Treasury in NHS funding

  1. The Crown is charged with the management of all the revenue of State, and with all the payments for public service. Departments (as representatives of the Crown) are required to present to Parliament their requirements for the financing of public services, which they do by presenting estimates of their expenditure, known as "Supply Estimates". Parliament will then vote on whether to authorise that expenditure and therefore provide the ways and means to meet it.
  2. Under a long-standing convention, departmental Supply Estimates must be approved by the Treasury before they are presented to Parliament and must be fully consistent with Treasury budgetary controls.
  3. Most departments’ Estimates (including DHSC’s) are then presented to Parliament by the Treasury as a single publication(1). The Commons then considers the Estimates put forward by the government and confirms authorisation of the amounts in the Estimates through passing Supply and Appropriation Acts annually which grant the supply of funding from the Consolidated Fund to Departments.

The Long Term Plan funding settlement

  1. In June 2018, the Government announced its intention to work with the NHS in England to develop a ten-year plan for the health service, underpinned by an increase in funding for the NHS in England amounting to a £33.9 billion per year increase in cash terms by the financial year 2023/24. This funding settlement was set out at Autumn Budget 2018.
  2. This long-term funding commitment aimed to provide the NHS with financial certainty allowing it to plan for the next decade.
  3. The NHS Long Term Plan was published in January 2019. It sets out how the NHS will develop over the next 10 years, including a move to more integrated care, a greater focus on prevention and changes to ensure financial sustainability.
  4. The table below sets out NHS England’s revenue funding for each year up to (and including) 2023-24. These figures include the Government’s funding settlement for the Long Term Plan.
    NHS England revenue budget 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 2023-2024
    Total budget (£bn) in cash terms 114.6 120.8 127.0 133.3 140.0 148.5

(1) This year’s estimates can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/800671/main_estimates_2019-20_web.pdf. Separate figures in relation to NHSE are included at page 129.

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