UK Chancellor George Osborne has committed to increasing NHS funding by £8 billion a year in the 2015 Budget.

“Our priority is the National Health Service,” Osborne said during his speech. “We will fund fully the plan the NHS has itself produced for its future, the Stevens plan.”

The Stevens plan sought to address the £30 billion funding gap in the NHS. It suggested that £22 billion of this could be covered by efficiency savings, leaving a further £8 billion needing to be covered. The Conservatives pledged to address this during their general election campaign.

“[The Stevens plan] requires very challenging efficiency savings across the health service that must be found. But it also requires additional government funding.

”Our balanced approach means I can today confirm that the NHS will receive in addition to the 2 billion we’ve already provided this year a further £8 billion. That’s £10 billion more a year in real terms by 2020.”

In a Budget Briefing on Monday, the King’s Fund said that failing to increase the NHS budget would risk damaging patient care, adding that 2015 will be the “most challenging” year in the recent history of the health service.

NHS’ reaction

Commenting on the Budget announcement, Rob Webster, chief executive of the NHS Confederation, says: “We welcome the formal commitment on increasing NHS funding by £8 billion by 2020/21.

“As highlighted in today’s budget document, the £8 billion needs to come in staged increases and we would emphasise this should reflect the bigger cost pressures expected in the first half of this parliament. There is an opportunity for a multi-year funding deal to be aligned with planning in the NHS, for example around pricing, contracting and allocations.

“The additional funding will also need to account for investment in transformation, to support double-running and other costs that will be needed to move to new models of care. 

“What cannot be forgotten though is the impact that social care cuts are having on the NHS. We need urgent action to look at how we address the gap in social care funding, currently estimated at £4 billion by 2020. 

“We also look forward to continuing to work with the Treasury and the Department of Health in addressing these urgent questions as part of the spending review due in autumn."