Ministers have “maxed out” the amount of money they can give the NHS and it must learn to live with smaller annual budget rises, the health service’s new boss in England has said.
The parlous state of the country’s finances means the government can no longer afford to hand the service big uplifts every year, despite the huge pressures it is under, Jim Mackey added.
“We are pretty much maxed out on what’s affordable. It is really now about [the NHS] delivering better value for money, getting more change, delivering on getting back to reasonable productivity levels,” said Mackey, who replaced Amanda Pritchard last month.
Speaking at an event in London on Thursday organised by the Medical Journalists’ Association (MJA), Mackey played down the prospect of the health service receiving significant extra cash in June’s comprehensive spending review.
Rachel Reeves, the chancellor, will publish the review – setting out government spending between 2026-27 and 2029-30 – on 11 June. In her first budget last October she gave the NHS in England an extra £22bn for 2024-25 and 2025-26.
Warning of tough choices ahead for the NHS, Mackey added: “In the end, it will be about how we get better value for money for the money that we’ve got. And we’ll get some growth in the spending review, but it’s never enough.”
The Institute for Public Policy Research thinktank, which is close to Labour, said Mackey’s remarks showed that England’s 215 care trusts were facing a “painful new reality”.
Sebastian Rees, the IPPR’s head of health, said: “Clearly, the very difficult state of the public finances confronting the government mean the days of the NHS getting almost automatic significant increases in its budget every year are over, for now at least.
“Keir Starmer and Wes Streeting just do not have the financial flexibility to give the NHS the 6% and 7% annual rises it got under Tony Blair and Gordon Brown.”
But Rees added: “Spending on high-quality NHS services is ultimately an investment in the health and prosperity of the nation. We know that solving many of the Treasury’s fiscal woes, such as tackling economic inactivity and reducing the social security bill, will require spending more on healthcare, not less.”
Mackey’s remarks come as the government is drawing up its promised 10-year health plan. The document is being put together by a team of advisers to Streeting, the health secretary, and is expected to be published in early July, close to the 77th anniversary of the creation of the NHS in 1948 by the post-second world war Labour government.
Mackey also defended budget cuts that trusts are making this year, which senior figures warned on Friday were “eye-watering” and would lead to service closures and cuts to staffing. They are the result of a brutal “financial reset” for the service that he ordered in March.
Without such tough action the NHS was on course to overspend by £6.6bn this year, despite its budget being about £200bn, Mackey told the MJA. “[There was] the shock that that was creating [in Whitehall], the worry that was creating, [and] the anxiety about what that meant for the economy, and [with] the international instability that we’ve got, what it meant for broader society.”
He also warned NHS leaders that, while he understood their concerns about having to operate within financial restraints, the huge fall in public satisfaction with the service over recent years should be their main concern. Only 21% of people are satisfied with the NHS, the latest British Social Attitudes survey revealed last month.
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Mackey added: “The thing we should all really bother about is the British Social Attitudes survey in all of this. It was really terrible last year [when satisfaction was 23%]. We all thought we’d bottomed out, and then it got worse in the latest one. So that was a really big shock; a really big sign that we’re in danger of losing that connection with the public. [That] we’ll lose that properly. We are in really serious trouble.”
The Department of Health and Social Care endorsed the chief executive’s views on funding. “The stark financial reality outlined by Jim Mackey reflects the scale of the challenge we inherited,” a spokesperson said. “The prime minister and secretary of state have been clear that the NHS must reform to deliver better value for taxpayers’ money.”
In January Streeting criticised what he called the NHS’s “culture of routine overspending without consequences”. The service had to “learn to live within its means”, he told the Health Service Journal.
In other remarks to the MJA, in his first public appearance since starting his role, Mackey:
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Voiced alarm that situations that previously would not have been tolerated, such as “old ladies being on corridors next to an emergency department for hours on end”, have become “normalised”.
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Said ministers had come to see the existence and independence of NHS England as “a complication”, because of “tension” and “frustration” over not being able to order it to do what they wanted, before they decided to abolish it.
