Reeves Rejects £1bn NHS Payout Plea from Streeting

Published: 13 November 2025. The English Chronicle Desk. The English Chronicle Online.

Chancellor Rachel Reeves has turned down a request from Health Secretary Wes Streeting for an emergency £1bn boost to the NHS budget to cover the cost of mass redundancies across England’s health service.

Streeting, who had been lobbying for months behind the scenes, sought the extra cash to fund redundancy payments for 18,000 staff set to lose their jobs as part of a sweeping reorganisation of the NHS. However, Reeves has opted instead to allow the Department of Health and Social Care (DHSC) to overspend its existing budget by roughly £1bn this financial year. The Treasury’s move comes with the condition that the department’s allocation for 2026–27 will be reduced accordingly, meaning no overall increase in funding.

The funding dispute underscores growing tensions within the government over NHS reform and spending priorities. The restructuring, which involves merging NHS England with the DHSC by 2027 and halving the workforce of the 42 integrated care boards, had already drawn criticism for its timing amid ongoing doctor strikes and drug price hikes.

NHS leaders had recently told ministers that an additional £3bn was needed this year to cover redundancy costs, industrial action by resident doctors, and unexpectedly high drug prices. The Treasury reportedly offered a compromise, suggesting it might fund redundancies if the DHSC absorbed the added cost of medicines — but no agreement was reached.

Despite the stalemate, Streeting is expected to confirm at the NHS Providers’ annual conference in Manchester that the redundancy programme will now proceed. He will frame the cuts as part of an effort to “strip away endless red tape and bureaucracy,” projecting annual savings of £1bn by 2029.

The DHSC insisted that the new funding arrangement would come from within the existing settlement, assuring that “no investment to the NHS, frontline or backroom, will be cut.” NHS England’s chief executive, Jim Mackey, welcomed the move, calling it “good news for NHS staff and patients” that would bring “greater certainty about the future.”

However, union leaders expressed dismay over the handling of the situation. Jon Restell of Managers in Partnership, which represents NHS executives, accused the government of creating “avoidable distress” for staff and warned that crucial expertise in planning and digital systems could be lost. He added that “the fate of important care board functions, such as continuing healthcare, remains uncertain,” calling the redundancies a blow to the government’s own long-term health strategy.

The decision marks a significant early test of Reeves’s fiscal discipline and Streeting’s reform agenda — one that will likely shape the political and operational direction of the NHS for years to come.