While the amount of extra cash the government has spent or plans to spend on health care remains the same £14.84 billion for the five years from 2010/11 to 2014/15 (inclusive) – the amount of this increase now likely to be swallowed up by inflation is £13.85 billion. This means there is now £610 million more to spend in real terms than previously estimated.
Over this Parliament (2010/11 to 2014/15) NHS spending in England will now grow in real terms by 1 per cent over five years instead of 0.4 per cent.
And over the period of the spending review (2011/12 to 2014/15), real growth will now be 1.5 per cent over four years instead of 0.98 per cent based on inflation estimates published in March 2011.
So, while the cash stays the same, what it can buy increases but largely as a result of technical changes in the way inflation is measured by ONS. While these changes, according to ONS, produce a more accurate measure of inflation, they do not of course change actual inflation.
For the NHS at the front line, the Chancellor's announcement of a further cap on public sector pay of 1 per cent in real terms each year for two years beyond the current real pay freeze will mean more money for other things in the NHS assuming that pay would have increased by more than 1 per cent in the absence of a cap.
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English NHS spending: 2009/10 to 2014/15 (2010/11 prices)