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Efficiency savings still needed

Commenting on the Spending Round, Mike Farrar, chief executive of the NHS Confederation, said: "Although the health budget has been spared a reduction, it is important to remember that NHS organisations are facing significant pressures to meet growing demand and improve quality, and still need to find substantial efficiency savings."

Mr Farrar continued: "Maintaining the ringfence for the NHS is vital, but it is important that the health service gets to spend what is allocated to it. Long-term investment and innovation in healthcare needs to be seen as a key part of the country's growth strategy, not an anchor holding it down."

Pooled budget for health and social care services

The NHS budget will be £110bn in 2015/16, a real terms growth of 0.1 per cent in 2015/16. The existing annual £1bn pledged to social care from the NHS budget will be increased to £3bn in 2015/16. This amount, as well as an extra £0.8bn from other pots of money will be placed into a shared budget between the NHS and local authorities.

Under the new arrangements, funds will be spent on health services as well as social care once they are locally agreed. There will also be stronger conditions in place in terms of how the money is used, and local joint plans will have to detail how the money is spent. The money will be routed via CCG allocations.

Mr Farrar said: "This allocation should help address the need to join up services and provide the right care for people, allowing them stay in their own homes. But NHS organisations will want to have strong assurances that the money going to social care does the job it is meant to do.

"Rather than see local health and social care budgets as separate, we need to support integrated care by bringing together providers and commissioners to look at how we can spend our money to the best effect."

Performance related pay

Public sector pay rises are frozen at 1 per cent until 2015/16 but it is intended that progression pay will be replaced by performance related pay.

Commenting on the proposals, Dean Royles, chief executive of the NHS Employers organisation, said: "Employers want to do everything they can to support staff and build morale but our biggest priorities must be maintaining and improving quality patient care and staff job security, both of which depend on sustainable pay bills and a focus on performance."
 
The NHS Confederation has been analysing the impact of the Spending Round on the NHS and social care, and has produced a briefing for members (PDF) that contains more detail of the health-related announcements for 2015/16.