SR25 - what the funding settlement means for the NHS
The Government has announced significant NHS funding increases in its Spending Review 2025, with £29 billion real-terms growth in day-to-day spending by 2028-29, bringing total annual funding to £226 billion.
Key Financial Commitments:
Annual NHS spending to reach £226 billion by 2028-29 (3.0% average annual real-terms growth)
£2.3 billion real-terms increase in capital budgets to invest in the NHS, including in new technology, hospitals and primary care
Up to £10 billion allocated for NHS technology and digital transformation by 2028-29
£30 billion over five years for estate maintenance and repairs
Waiting Times and Service Targets
The funding aims to support the government's target of 92% of patients starting consultant-led treatment within 18 weeks of referral by end of Parliament. Current performance stands at under 60%, with waiting lists at 7.4 million despite recent reductions of over 200,000.
Digital and Technology Investment
Plans include developing the NHS App as the digital front door to the NHS, enabling patients to manage medicines and prescriptions, receive NHS communications securely and increase their access to medical services such as tests directly. This investment will also deliver a single patient record, giving patients a unified view of their medical history and enabling two-way communication and active management of their healthcare.
Funding will also be used to help scale the most promising opportunities for AI adoption in the public sector, including reducing hospital waiting times.
The technology investment represents approximately a 50% increase from 2025-26 levels.
Infrastructure Projects
25 new hospitals through the New Hospitals Programme
Replacement of seven hospitals built with RAAC concrete
Target to eliminate all RAAC from NHS estate by 2035
Workforce and Service Expansion
Additional GP training and recruitment programs to deliver millions more appointments a year
700,000 additional urgent NHS dentist appointments per year
8,500 additional mental health staff positions by end of Parliament
Mental health support teams to be expanded to all schools by 2029-30
Efficiency Requirements
The NHS is expected to deliver 2% annual productivity growth, generating £17 billion in savings over three years for reinvestment back into the health service and support the radical transformation which will be set out in the 10 Year Health Plan. NHS England will be merged into the Department of Health and Social Care as part of structural reforms.
Digital Healthcare Council Response
The Digital Healthcare Council welcomes the Spending Review’s recognition of the importance of digital transformation in the NHS. Investment in modern infrastructure, data, and interoperable systems is essential for improving access, safety, and efficiency. We urge the Government to prioritise partnerships with proven digital-first providers to ensure these ambitious digital health goals are delivered and will continue to support partnership working.
The Spending Review covers the period to 2028-29 for revenue spending and 2029-30 for capital investment. Read it in full here