Chancellor gives further details of capital funding

by Seamus Ward

08 July 2020

Today’s summer economic update by chancellor Rishi Sunak has shed more light on the recent announcement that an additional £1.5bn in capital funding will be allocated to the NHS this financial year.

In the update Mr Sunak (pictured) focused largely on restarting the economy and minimising a predicted unemployment crisis due to the impact of Covid-19. However, accompanying documents show more detail on the promise to allocate additional capital funding for hospital maintenance, to eradicate mental health dormitories, enable hospital building, and improve A&E capacity.Rishi Sunak HM Treasury

The document, Plan for jobs, broke down the allocation:

  • £1.05bn in 2020/21 to invest in NHS critical maintenance and A&E capacity across England.
  • Up to £250m in 2020/21 to progress the replacement of mental health dormitories with 1,300 single bedrooms across 25 mental health providers in England.
  • A further £200m to support the Health Infrastructure Plan, to accelerate the scheme under which the government has promised 40 new hospital building projects in England.

The document also showed how government Covid spending has increased in the NHS. So far, the Treasury has approved £48.5bn of additional expenditure on public services’ Covid response, it said. This included £31.9bn of support for health services, broken down into more than £15bn for PPE procurement; £10bn for the government’s Test, Trace, Contain and Enable programme; over £1bn to procure additional ventilators; and £5.5bn on a variety of schemes, such as the agreement to use independent sector facilities, the enhancement the NHS hospital discharge process and funding for domestic vaccines R&D and manufacturing.

In April, the government announced £6.6bn to support health services, including support to free up hospital beds, buy ventilators, diagnostic tests and PPE.

On top of the health service spending, £4.7bn has been approved for local government, including: £3.7bn for social care, the delivery of additional support to vulnerable people and to continue to respond to the coronavirus pandemic; £600m to support infection control in care homes; and £221m to support rough sleepers through the pandemic.

‘We supported public services, with new funding for the NHS, schools, public transport, and local authorities. In total, we have now provided £49bn to support public services since this crisis began,’ Mr Sunak told the Commons.

NHS Providers deputy chief executive Saffron Cordery said: ‘We are pleased the chancellor confirmed plans to speed up capital investment in the NHS, including the very welcome but long overdue replacement of mental health dormitories with single bedrooms.'

The provider body’s recent #RebuildOurNHS campaign highlighted how capital spending had slipped year after year, but showed the positive impact that a properly funded and well-designed system of capital funding would have, she said.

'The coronavirus pandemic has underlined the urgency of updating and modernising the NHS estate to provide clean safe therapeutic environments for patients and for staff. The chancellor is also right to prioritise funding for testing and PPE which have proved so problematic during the pandemic and remain serious concerns despite recent progress.’

The summer update included several measures not directly targeted at the NHS, from which the service may benefit. For example, the chancellor released £1bn to improve the energy efficiency of public sector buildings. And he outlined support for apprenticeships and traineeships. Over the next six months, employers that hire new apprentices will receive a new payment of £2,000 per apprentice. For apprentices older than 25, there will be a new payment of £1,500. For the first time employers will be paid to take on new trainees (£1,000 per trainee).