George Osborne is facing criticism after it was revealed that his highly anticipated extra £2 billion per year of “extra NHS funding” actually includes a re-allocation of £750 million from the Department of Health.
Government sources told the Guardian that the re-allocation of the £750 million from the Health Department would be “essentially moving money from the [back office] to the NHS front line.” The source further said the rest of the funding would be drawn from under-spending in other government departments.
The revelations call into question the legitimacy of Osborne’s plan to put healthcare at the forefront of his autumn statement. The Conservatives currently lag behind Labour in the health opinion polls, something which Osborne could be attempting to rectify in the lead up to the general election.
Shadow Health Secretary Andy Burnham called the £2 billion figure a “spin”, claiming Osborne was simply “recycling” funds, rather than allocate more.
“Labour’s plan is fully funded and will give the NHS £2.5 billion a year over and above the plans left by this government,” he said.
Chief Executive of the Nuffield Trust health think tank Nigel Edwards said the increased spending would aid the NHS “through what looked like being an impossible year,” but voiced concerns that recycling funds may not always provide a viable option.
“Taking money from elsewhere in the health budget may not be an option in coming years, as the vast majority already goes towards the NHS and underspends are running out. Future increases will have to be almost entirely new money,” he added.
Osborne, however, refuted the idea that the increase in health spending was unsustainable, saying to Andrew Marr that more funds would be released should the government make further cuts to the welfare system.
The widely-publicized increase in NHS spending was announced prior to the chancellor’s autumn statement on Wednesday, and was well received by health experts.
The Conservatives justified labeling the apparent increase as ‘extra funding’ by claiming that a further £1.1 billion, taken from the fines from UK banks involved in the Libor rates-rigging sandal would also be spent modernizing general practitioners’ surgeries.
The pledge further prompted Labour to issue a reactionary promise of an increased £2.5 billion a year for the NHS, taken from its ‘Time to Care’ fund.
The Chancellor’s announcement followed the launch of the NHS’s five-year-plan by Chief Executive Simon Stevens in October. Osborne described the extra funding as a "down payment” on the five-year-plan while speaking on the BBC’s Andrew Marr Show.
Stevens said that the NHS would need an extra £8 billion by 2020 if the plans are to succeed, a statement which Health Secretary Jeremy Hunt will formally accept in a speech to the Commons on Monday.
The recent revelations that some extra funding will be drawn directly from the health budget raises questions about where the government will find the requisite amount to make the five-year-plan a success.
In his speech on Monday Hunt will not announce where the £8 billion will come from