NHS £3.3bn increase explained

The spring statement (table 1.4) indicated the NHS England budget was planned to be £157.4bn in 2023/24. But this week's Budget report (table 2.1) puts the new figure at £160.4bn – an increase of just £3bn.

According to figures provided by the Treasury, this still reflects an increase of £3.3bn. However, it takes account of adjustments relating to the removal of the health and social care levy and the addition of funds for adult social care being channelled through the NHS.

The health and social care levy was abolished from November. It was being collected via an increase this year in national insurance contributions – both from employees and employers – with the new tax originally planned to be introduced from next April. As part of the changes, public sector bodies were being compensated for the costs of the increased employer national insurance and levy costs.

With the abolition of the levy, this compensation is no longer needed. So, the spring statement figures for 2023/24 need to be reduced by £600m as a starting point for any funding increase.

Some £300m of adult social care funding is also being distributed via the NHS, so this involves an addition to NHS England budget – albeit funded from the Department of Health and Social Care budget.

Taken together this means the £160.4bn NHS budget for 2023/24 represents an increase of £3.3bn on the figures included in the spring statement.

	£bn
2023/24 NHS budget (March 2022)	157.4
Add the new funding	+ 3.3
Add adult social care money	+ 0.3
Remove levy cost compensation	- 0.6
2023/24 NHS budget (November 2022)	160.4

On the face of it, the £3.3bn increase for 2024/25 looks to be directly readable from the November statement, rising from the £162.6bn published in the spring statement to the new figure of £165.9bn. But, in fact, this has been adjusted in the same way, with changes for the removal of levy cost compensation offset by an increased amount of social care funding being channelled through the NHS budget.