Towards the end of 2025, Rachel Reeves unveiled her autumn budget. The NHS was framed as one of its winners, with the chancellor saying that she had chosen to protect the health service, while other departments are facing cuts.
EveryDoctor has taken a closer look at all the government’s announcements on the NHS to find out if they stack up.
A modest bump in NHS capital budgets
The budget included £300m of additional capital investment in NHS technology, which seems to be intended as a further investment in developing the NHS App and single patient care records.
The additional tech funding is no doubt welcome but it seems rather modest after the £10bn that was previously announced.
Aside from the funding boost for technology, there was no substantive increase to the NHS’ day-to-day spending announced. Instead, it seems the government is banking on productivity gains from technology offsetting flatlined budgets.
But just days after the budget, the UK announced a pharmaceutical deal with the US that could end up costing the NHS an additional £3bn a year, throwing into question whether the current budget is financially sustainable.
A resolution to the stand off over redundancy payments
Earlier this year, the government announced that it would abolish NHS England and merge it with the Department of Health and Social Care (DHSC).
The plan, which involved cutting 18,000 admin and managerial jobs from NHS England and local health boards, ran aground after it emerged that the bill for redundancy costs will reach £1bn.
The Treasury initially refused to cover the additional cost but it now appears to have reached a compromise. The health service will now be permitted to overspend on its budget this year to pay for the redundancies, rather than being forced to make cuts to spending.
However, that means that the NHS will have to recoup the costs further down the line, putting further pressure on its budget in later years. In other words, the financial hit has been delayed rather than avoided.
The doors are open to PFI 3.0
The budget announced two important changes about the government’s planned neighbourhood health centres. These new centres will aim to deliver some health services typically provided in hospitals in more convenient locations in communities.
The government has now set a goal for 120 centres to be operational by 2030, with 250 open by 2035.
More significantly, the chancellor decided to allow the DHSC to use public-private partnerships (PPP) to deliver some of the centres.
The use of PPP to build new infrastructure has been effectively banned for the last seven years after it was found to be poor value for money. As EveryDoctor revealed earlier this year, the NHS is still paying millions of pounds every year to private companies for hospitals built using PPP in the 1990s and 2000s.
The government says that it will only use private investment to build new centres where it provides value for money to the taxpayer and that a new PPP model will “learn lessons from the past”.
But as we’ve previously discussed, there is little sign that investors are willing to accept terms more favourable to the public.
Freezing prescription charges
Also announced at the budget was the decision to freeze prescription charges in England at £9.90 per item. While the move is a welcome gesture amid the cost of living crisis, it seems far less generous in comparison to Scotland, Wales and Northern Ireland – all of whom abolished charges years ago.
Tougher efficiency savings
The budget sets a new target of increasing NHS productivity by 2% per year, which would result in £17bn of savings that the health service would be allowed to keep and reinvest.
The target is far higher than the historical average: between 1997 and 2019, productivity in the health service grew by an average of 0.9% per year, according to the Office of National Statistics (ONS). Productivity took a significant hit during the pandemic and has been slow to return to previous levels raising questions about how feasible such savings are.
The budget may have avoided immediate cuts, but it does little to change the NHS’s underlying financial position.
By relying on future savings, delayed costs and private investment, the government is once again asking the health service to do more with less.
History suggests that approach comes at a high price; one ultimately paid by staff morale, patient safety and public trust.
