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Has Boris Johnson found a magic money tree for the NHS?

After years in hibernation, Westminster’s magic money tree appears to be flowering once more.

Or so critics of the new government like to point out, nodding to the spending spree Boris Johnson has gone on in the 12 days since he took office.

The latest commitment is £1.8bn for hospitals across the country.

Image: Experts say all the funds aren’t necessarily new cash

But where is the money coming from?

The health secretary insists that “every penny” is new funding.

Health economists and policy analysts aren’t so sure.

They say it’s not correct to see this £1.8bn as wads of fresh bank notes being marched off from Westminster to hospitals around the country.

Ben Gershlick, from The Health Foundation charity, welcomed the fact that hospitals could now start spending more to improve their facilities, but cautioned it wasn’t necessarily all new cash.

“Some of it will be money they have already on their balance sheets and they’re allowed to spend… some of it will be plans they had that they were recently asked to scale back,” he said.

Image: Boris Johnson has unleashed a spending spree

Indeed, in May the chief financial officer of the NHS wrote to trusts asking them to reduce expenditure on things like equipment and buildings so as not to bust strict government spending limits.

The funding announcement will give hospitals more freedom to turn the spending taps on again.

Sally Gainsbury from the health think tank The Nuffield Trust says half of the announced funding is actually cash that hospitals had already earned.

That’s because for years now, NHS trusts have been cutting back day-to-day funding in the hope of being rewarded with a cash lump sum to upgrade facilities.

Image: For some, arguments about where the money comes from misses the point

Ms Gainsbury said £1bn of this pot was frozen earlier this year, and hospitals were forbidden from spending it.

That cash, she said, has now been released.

“News that £1bn will now be available this year is a welcome reprieve, but it’s the equivalent of giving someone cash then banning them from spending it, only to expect cheers of jubilation when you later decide they can spend it after all,” she wrote on Twitter.

Perhaps that’s why there’s been a subtle change in language as the day has progressed.

Asked about the suggestions from health analysts that this wasn’t new money, one government source simply texted “the NHS has £1.8 billion to spend now that it didn’t last week”.

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That sentiment was repeated by NHS England’s medical director Stephen Powis, who told Sky News it is “money that wasn’t available last week”.

That is categorically true, but is it the same thing as new money?

The answer probably depends on who you’re talking to.

And given the dense nature of NHS funding and the broad nature of this announcement, we may only get the true answer when more detailed accounts are published.

But speaking to hospitals this morning, it is clear some genuinely new cash is being made available.

The deputy chief executive of Luton and Dunstable Hospital said their £99.5m slice was based on a bid previously been turned down that had now been given the go-ahead.

Still, there’s no clarity from government where that new cash is specifically coming from, beyond the somewhat vague answer of “the Treasury”.

Image: Ministers have only claimed the money will come from ‘the Treasury’

It’s also important to say, for many stretched hospitals, torturous Westminster arguments over funding sources and what counts as “new money” miss the point completely.

What matters is the fact that hospitals can now be upgraded and patients given a better service.

But be in no doubt, politics hangs heavy in this announcement.

Of the 20 hospitals allocated funding, 12 are in Leave-voting areas.

Spread them out on a map and you’ll see they are predominantly in the Midlands, Eastern England and the North, with just four in the South East, South West and London.

There are plenty of seats in those regions that the Conservatives will want to take whenever the next general election comes.

This may not be the re-sprouting of the magic money tree, but the prime minister is sowing the seeds for something.


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