Health chiefs spent around half of the £2 billion extra cash allocated in George Osborne’s pre-2015 election Autumn Statement on buying care from private and other non-NHS providers, an analysis has shown.
The Health Foundation research for the Financial Times showed £901 million was spent on buying services from outside the health service in 2015/16 for care provided free at the point of use for NHS patients.
It compared with £800 million spent on purchasing the same kind of care from NHS trusts.
In his 2014 Autumn Statement, former chancellor Mr Osborne described the money for NHS England as a “down-payment on the NHS’s own plan” and said it would go towards front-line services.
The report also found that £1 in every £8 of local commissioner’s budgets in England is now spent on care provided by non-NHS organisations.
The Health Foundation said the figures showed NHS providers have not had the capacity to deal with rising demand.
Anita Charlesworth, director of research and economics at the Health Foundation, said: “Rising demand for emergency care meant that NHS providers haven’t had the capacity to deliver planned care and patients had to be diverted outside the NHS.
‘NHS hospitals were left squeezed by sharply rising drug and staff costs with little additional funding.
"The result was big deficits that had to be covered by raids on investment budgets.
“The NHS urgently needs to look at how to ensure additional funds reach NHS providers.
“The health service needs to plan better for emergency demand, fund emergency care fairly and make sure it gets the best possible price for care provided outside the NHS.
The Department of Health said the report simply showed the NHS was judging how best to deliver care and and spends less than 10% of its budget on independent providers.
A spokesman said: “This report simply shows the NHS is making clinical judgments about delivering high-quality care for patients – the truth is that for many years the independent sector has made a contribution to helping the NHS meet demand, now amounting to less than eight pence in every pound the NHS spends.”