As Theresa May announces £20bn Health Service spending boost she is told to go to war on NHS waste 

Theresa May was today warned she must deliver on her pledge to cut NHS waste as she announced a £20billion spending boost.

In a major speech in London, the Prime Minister will promise a funding injection to ‘secure our greatest national inheritance for generations to come’.

She will say the extra cash – worth an extra £394million a week in real terms – must come hand in hand with a new drive to tackle waste and bureaucracy.

Pledge: Theresa May during her TV interview with Andrew Marr yesterday

MPs said the money must be conditional on the Health Service taking action to cut excess spending on everything from agency nurses to rubber gloves.

There were already fears last night that middle-class families could face tax pain to pay for the announcement, designed to mark the 70th anniversary year of the NHS.

Mrs May has insisted the new settlement will be funded in part by a ‘Brexit dividend’ generated by the UK no longer having to pay EU membership fees.

But she has conceded that the country will need to contribute ‘a bit more’ to cover the full cost of the extra funding.

Although details will not be set out until the Budget this autumn, ministers are understood to be considering a freeze on income tax thresholds. Any freeze could result in millions more families having to pay higher rates of tax. As the announcement electrified Westminster:

  • Labour was left completely outflanked, with the party scrambling to match the Tories’ health funding plans, after initially attempting to dismiss them; 
  • Many health bosses welcomed the extra cash, saying it would bring much-needed improvements to cancer care and mental health, although others complained the increase still wasn’t enough; 
  • Boris Johnson hailed the announcement as ‘fantastic news’ and said it represented a ‘down payment on the cash we will soon get back from our EU payments’;
  • A row broke out over Mrs May’s ‘dividend’ claim as one Tory MP called it ‘tosh’.

In her speech to healthcare leaders and staff this morning, Mrs May will pledge that the NHS is the Government’s ‘number one spending priority’ and pay an emotional personal tribute to its work. ‘By 2023/24 the NHS budget [in England] will increase by over £20billion in real terms compared with today,’ she will announce. ‘That means it will be £394million a week higher in real terms.’

The Scottish government will also be given £2billion, Wales will receive £1.2billion, with hundreds of millions for the Health Service in Northern Ireland. In a surprise additional boost, a further £1.25billion will be allocated each year to relieve NHS pension deficits.

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments while £26million a year is spent on prescriptions for gluten-free food

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments while £26million a year is spent on prescriptions for gluten-free food

However, in return Mrs May will ask the NHS to produce a ten-year plan later this year that includes significantly improving access to good mental health services and cutting waste.

She will warn there cannot be a repeat of the increases in NHS spending under New Labour, when she said nearly as much as half of the money failed to get to frontline staff to improve patient care.

She will say: ‘This must be a plan that ensures every penny is well spent. It must be a plan that tackles waste, reduces bureaucracy and eliminates unacceptable variation, with all these efficiency savings reinvested back into patient care.

‘It must be a plan that makes better use of capital investment to modernise its buildings and invest in technology to drive productivity improvements. It must be a plan that enjoys the support of NHS staff across the country – not something dreamt up in Whitehall and centrally imposed.’

There have been high-profile examples of NHS waste in recent years. For instance, one hospital was found to be spending £16.47 on a pack of 12 rubber gloves, while another spent 35p. On toilet roll, some hospitals pay 67p per roll, others pay just 34p.

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments, £26million a year is spent on prescriptions for gluten-free food even though it can be bought from supermarkets, and £1.5billion a year is spent on agency nurses.

Last night, Tory former Cabinet minister John Redwood said Mrs May must follow through with her promise to crack down on NHS waste. He said: ‘When we had the Blair/Brown years, they gave huge sums to the NHS and other public services and got very little gain for it because productivity either stayed the same or fell away.’

Former health minister Lord Darzi added: ‘The proposed increase in NHS funding is very welcome but must be accompanied by a serious plan for reform. NHS staff are trapped working in a fractured system that is in desperate need of radical simplification.’

Mrs May’s announcement represents a victory for Brexiteer ministers such as Boris Johnson and Michael Gove, who were part of the Vote Leave campaign that emblazoned a slogan about spending an extra £350million a week on the NHS on the side of their red bus.

Mr Johnson tweeted: ‘Fantastic news on NHS funding – a down payment on the cash we will soon get back from our EU payments.’

But Mrs May faced a backlash from Remain supporters who questioned how much money would be available. Sarah Wollaston, the Tory chairman of the Commons health select committee, tweeted: ‘Don’t even begin to swallow any rubbish that this will be some Brexit bonanza. In reality the tax rises and borrowing will need to be higher as a result.’

Last night, Government sources said final decisions had yet to be made on how to pay for the extra spending.

Any freeze on tax thresholds could drag millions more families into higher tax bands.

The Tories have pledged to raise the threshold for paying basic rate tax to £12,500 and higher rate tax of 40p to £50,000 by 2020. Delaying or scrapping these planned rises could leave middle-earning families paying more as wages rise and they are caught by a higher band. Freezing the thresholds from 2020 onwards could raise as much as £4billion in the first two years.

Simon Stevens, chief executive of NHS England, said the money would provide ‘renewed certainty’. But Chris Ham, of the health think-tank The King’s Fund, said: ‘The Prime Minister has administered a welcome shot in the arm that will get the NHS back on its feet but not provided the long-term cure that would restore it to full health.’