Will the NHS get the money it needs?

Many senior Whitehall civil servants will spend August locked away from the summer sun, pacing around whiteboards and poring over spreadsheets as they process the Chancellor's order to cut 40 per cent from non-protected departments. Coming on top of years of austerity, these are cuts beyond efficiency, trimming or skimping. They mean redesigning whole areas of life so that the public sector does less and the private sector more.

The health service looks like the happy exception. It has been promised an additional £8bn each year by 2020, on top of around £10bn to keep up with inflation.

But the reality is much more complicated. When will this new money come in? Is it already being spent on new initiatives? And will it be taken away with one hand from the health service, to be given to NHS England?

Although the Coalition's ring-fencing pledge applied to the health budget as a whole, Government sources have told us that the Chancellor's promise applies specifically—and only—to NHS England, the powerful body Andrew Lansley put in charge of most English health services. If true, that makes it possible and tempting to take a significant chunk of NHS England's extra money from the over £15bn the Department of Health spends on other organisations.

The bulk of this spending goes to areas that directly support the provision of NHS services.  These include insuring the NHS against litigation; paying for new buildings and facilities; improving public health; research and development, and around £5bn on clinical training.

Money for training doctors and nurses goes through another NHS body, Health Education England. In the language of the Treasury, it isn't part of the "NHS budget." Yet much of it ends up covering costs in hospitals and other NHS bodies. Of the £4.8bn spent on professional education and training last year, some £3.2bn ended up elsewhere in the health system.

Some of this money will pay for doctors and nurses who actually carry out patient care alongside their senior colleagues as they learn; some will pay more straightforwardly for training. In the long run, the health service cannot afford to lose either.  An under-supply of nurses means hospitals are forced to pay high prices for agency staff.

The health service spends twice as much money treating diabetes as it does on all infectious diseases combined. That figure will almost certainly have risen by 2020, and the deciding factor in how far it goes will be diet and lifestyle more than anything under the control of NHS England. The story is the same for lung disease, strokes and heart attacks.

Yet so far this year we have already seen a £200m cut to the public health budget which funds preventive services to improve diets and help people stop smoking. A survey showed 77 per cent of public health specialists thought this would mean less action on obesity. And once again, some of that funding would have gone straight into the health service—to pay for basic services like flu vaccinations.

We are also still uncertain when the new money will arrive. The £8bn figure comes from the Five Year Forward View. This 2014 NHS policy document suggests the money should help the NHS transition to new models of care, bringing together GPs, community nursing and hospitals. These should then help deliver savings and better quality care towards the end of the decade, once they are up and running.

To make this work the health service needs more spending up front. But the Government has pledged a budget surplus by 2018, meaning that those are the exact years when the squeeze will be tightest. The Treasury will want to hold most of the spending back until after this, creating a gap in the crucial years when the NHS is supposed to invest.

And even now, claims on that £8bn are starting to multiply. The figure was identified by NHS England as the minimum necessary to fill the gap created by more patients needing more treatment. But recent announcements have added more things to the shopping list while assuming the same bill. Seven day working which could cost billions; a new cancer strategy priced at £400m; improved staffing levels in hospitals and a much-needed spending boost for general practice. All good stuff—but all of it will cost money.

All will start becoming clear with the Spending Review this autumn. It may be that the UK’s budget aims are so steep that the health service simply has to take its share of the pain. But if so, we need to face the consequences head on—not disguise the reality behind the arcana of government accounting.