Chancellor of the Exchequer George Osborne, Britain’s highest ranking finance official, presented his Spending Review to the House of Commons in October, unveiling £83 billion (US$130 billion) in cuts by 2015. Government departmental budgets will be reduced by an average of 19 percent over the next four years. The National Health Service (NHS), however, has been spared. The NHS is not only exempt from the cuts, but will receive annual increases until 2015.
NHS spending in England will rise by 0.1 percent per year over the next four years, from a total of £104 billion (US$160 billion) in 2010 to £114 billion in 2014. However, this rise is relatively small when compared with the 6 percent annual increase the NHS has had for the last decade, and unlikely to keep up with the rising demands of the health sector, such as the costs of medical advances and an aging population. In fact, the extra money is expected to go toward the planned Value Added Tax (VAT), or sales tax, hike and by increases in salary costs.
The NHS is still expected to realize £20 billion in efficiency savings over the next four years, with the Department of Health, which oversees the NHS, facing a 30 percent cut to management costs and the NHS itself facing a 45 percent management cut. Savings are expected to be reinvested in patient care, though Sir David Nicholson, chief executive of the NHS, acknowledged that part of the savings will go toward organizing GP consortia and introducing other reforms set out in the white paper, "Equity and Excellence: Liberating the NHS."
Sources:
http://www.direct.gov.uk/en/Nl1/Newsroom/SpendingReview/DG_191682
http://www.bbc.co.uk/news/uk-politics-11569160
http://www.nytimes.com/2010/10/21/world/europe/21britain.html
http://www.bmj.com/content/341/bmj.c6024.full (subscription required)
http://www.bmj.com/content/341/bmj.c5952.full (subscription required)