Extra funding for the NHS in England has been announced by ministers in what they are calling a 70th “birthday present” for the health service.
The spending plan means the £114bn-a-year budget will rise by over 3% a year on average in the next five years.
That will mean by 2023 the budget will be £20bn a year more than it is now once inflation is taken into account.
But crucially the plan just covers frontline budgets overseen by NHS England.
About a tenth of the overall health budget is held by other bodies for things such as training and healthy lifestyle programmes, such as stop smoking services and obesity prevention programmes.
The BBC understands these will be protected, but beyond that it is unclear what will happen to them.
The 2015 spending review – the last time a five-year settlement was announced – saw these budgets cut to help pay for an £8bn increase in NHS England’s budget.
The deal has been reached after a series of meetings between the chancellor and Health Secretary Jeremy Hunt and NHS England chief executive Simon Stevens in recent weeks.
They had been locked in negotiations after Prime Minister Theresa May promised there would be a long-term settlement agreed this year.
With the NHS celebrating the 70th anniversary of its creation in July, there had been a desire to see something announced before then.
Mr Hunt said this had been achieved, giving the NHS a “fitting birthday present for our most loved institution”.
He added: “It recognises the superhuman efforts made by staff over the last few years to maintain services in the face of rapidly growing demand. But it also presents a big opportunity for the NHS to write an entirely new chapter in its history.”
The announcement means extra money will also be made available for Scotland, Wales and Northern Ireland, although it will be up to the Welsh and Scottish governments to decide how that is spent.
Is this more than expected?
There has been a lot of speculation that Mr Hunt – supported by Mr Stevens – had been pushing for close to 4% a year extra.
This was the figure many in the health service had said was needed to get services back on track and to improve waiting times.
Reports have suggested the Treasury were initially offering less than 3%.
So the 3.4% average appears to be a compromise between the two camps – and is close to the 3.7% average increase the NHS has seen if you look back over the last 70 years.
The final picture is somewhat clouded by the lack of clarity about what will happen to the wider health budget.
What it does mean is that the five-year funding plan announced in 2015, which was meant to see the budget increase by £8bn above inflation by 2020, has been effectively ended two years early.
And that comes after ministers agreed in autumn 2017 to top that up by another £2.8bn.
Analysis: By Hugh Pym, BBC News Health Editor
Its been a protracted Whitehall wrangle.
The Treasury, mindful of pressures across public finances, was reluctant to offer the NHS much more than 2 per cent in real terms per year.
NHS leaders made it clear that only a 4% annual increase would allow an improvement in services.
In the end, with the 3.4% agreed deal the NHS didn’t quite get what it hoped for but the Treasury was pushed higher than it originally wanted after forceful lobbying by Jeremy Hunt.
The Head of NHS England, Simon Stevens, has welcomed his 5 year allocation. But the deal does not cover public health or medical and nurse training budgets and only when they are unveiled in the autumn with a complete picture on health funding in England become clear.
‘Don’t forget social care’
Ian Dalton, head of NHS Improvement, a regulator in charge of monitoring performance in the health service, said: “This settlement is good news for the NHS, those who use it and those who work for it.
“It will enable the dedicated staff in our NHS to go on improving the care we can offer the patients.”
But Chris Hopson, chief executive of NHS Providers, which represents NHS trusts, said the settlement was the “minimum” that was needed.
“After almost a decade of austerity, the NHS has a lot of catching up to do.”
He also pointed out that the government needed to work out what it was going to do about social care run by councils.
Ministers have promised the system, covering care homes and help at home, will be reformed soon to ensure there is better access to services.
