Prime minister Theresa May has announced a new five-year funding settlement for the NHS, giving the service real-terms growth of more than 3% for the next five years. In a major speech at the Royal Free London NHS Foundation Trust and two interviews over the weekend she has also tasked the NHS with producing a 10-year plan to improve performance, specifically on cancer and mental health care, and unpick barriers to progress.

This briefing summarises and includes our view on the announcements.

Key announcements

Government reveals more money for the NHS

• The government has announced a major new package of funding for the NHS covering the five financial years from 2019-20.
• The average annual uplift is 3.4 per cent per year above inflation – based on Office for Budget Responsibility projections.
• The funding is frontloaded, meaning the annual rates of growth are: 3.6%; 3.6%; 3.1%; 3.1%; 3.4%.
• This will equate to £20.5bn more revenue in real terms compared with 2018-19.
• A further £1.25bn has been found to deal with an increase in pensions costs associated with the new Agenda for Change pay deal.
• The funding is for the NHS England commissioning budget only. This means it does not include capital funding, public health, health education, or social care.
• In an appearance in front of the Public Accounts Committee this afternoon, Simon Stevens said there was an explicit commitment from the government that the adult social care budget would be set to not put further pressure on the NHS.
• Although there have been assurances that these will be protected, there is no hard data on these areas and it is not clear whether these budgets, which have been cut in the past, will be restored to or simply ring-fenced at their current levels.
• This afternoon, Simon Stevens told MPs the extra money does include funding for an increase in Agenda for Change salaries from next year.
• How the increase will be funded is unclear. While the prime minister has emphasised that some of it will come from monies no longer being paid to the European Union, along with tax and borrowing rises, the “Brexit” element has been disputed by economists.
  
  

A 10 year plan

• In return for the increase in funding, the NHS has been tasked to develop a 10-year plan, via an “assembly” convened by national leaders. The prime minister has emphasised that this should have strong clinical input.
  The 10-year plan, which will likely be delivered by the autumn budget, should set out how the service intends to deliver major improvements in mental health and cancer care.
• Ministers may be considering legislative reform: the prime minister described the number of contracts held between NHS organisations as a “problem”, and said she wanted the service to suggest ways of breaking down any barriers that might hold up progress, including in the regulatory framework.
• The prime minister set out five priorities for the NHS: Putting the patient at the heart of how care is organised; a workforce empowered to deliver the NHS of the future; harnessing the power of innovation; a focus on prevention; and “true parity of care” between mental and physical health.
• The prime minister said she would like to see the 10-year plan set out ambitious “clinically defined access standards” for mental health.
• And, she said clinicians should confirm the NHS is focused on the right performance targets for both physical and mental health – indicating that ministers may be willing to reconsider key performance standards.