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The prime minister’s hopes of trumpeting his party’s commitment to the National Health Service were overshadowed on Monday by a row over how much of a promised £1.8bn in additional funding amounted to new money.
Speaking in Lincolnshire after announcing a hospital building programme, Boris Johnson said: “Don’t forget that this is £1.8bn of new money that wasn’t there 10 days ago.”
Stressing that the funding was on top of an extra £34bn in cash terms by 2023-24 announced last year by his predecessor Theresa May, Mr Johnson, who has identified health as his main domestic priority, told Sky News: “My job is to make sure that we use the funds that go into the NHS to reduce the time you wait to see your GP, the time you wait in [accident and emergency].”
However, Downing Street was put on the defensive after a leading expert on health service finances said much of the money had already been sitting unspent on hospital balance sheets, as a result of Treasury restrictions on capital expenditure.
Sally Gainsbury, senior policy analyst at the Nuffield Trust think-tank, said hospitals had accumulated the money through a three-year incentive scheme under which if they cut their spending by 50 per cent more than they needed to in order to break even, they were rewarded with cash to spend on capital projects.
In each of the three years, up to 90 of the 226 NHS trusts in England qualified. However, owing to subsequently-imposed Treasury capital spending limits, the money could not be spent.
In a tweet, Ms Gainsbury said: “News that £1bn will now be available this year is a welcome reprieve, but it’s the equivalent of giving someone cash then banning them from spending it, only to expect cheers of jubilation when you later decide they can spend it after all.”
Jonathan Ashworth, shadow health secretary, said Mr Johnson had “misled the public and our NHS staff” and the prime minister’s claims were “unravelling”. He added: “It is now clear this is not new money, but funds already earmarked for hospitals which ministers previously blocked.”
In response, Matt Hancock, health secretary, tweeted that the £1.8bn was “new cash for the NHS — the NHS capital budget is today £1.8bn higher than yesterday”.
Chris Hopson, chief executive of NHS Providers, which represents hospital leaders and had campaigned for the Treasury capital expenditure limit to be lifted, said the funding announcement meant “frontline NHS providers will be able to spend £1bn in 2019-20 on backlog maintenance and other capital spending that they weren’t able to spend last week”.
Since the Department of Health and Social Care’s capital spending limit would now be increased, and that would count against overall government capital spending limits, “by our definition that is genuine, new, extra, money,” Mr Hopson said.
At the same time, he acknowledged, the spending could “legitimately be described as money that trusts already had, but were told they couldn’t spend and are now able to spend”.
Eleanor Roy, health and social care policy manager at the Chartered Institute of Public Finance and Accountancy, said that while the extra £1.8bn of capital funding was “greatly welcome”, it “should be noted that more than half of this ‘boost’ to the NHS represents cash that many NHS providers already have”.
Officials made clear that the £850m allocated to the hospital building programme was separate and had been drawn from the “fiscal headroom” bequeathed by Philip Hammond, the former chancellor.
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