NHS boss claims Labour ought to contemplate personal funding to repair crumbling hospitals – and admits a lot of £25bn money injection on the Budget has been swallowed by workers pay rises

Labour need to consider the use of private capital to fix crumbling hospitals, the boss of NHS England has said.

Amanda Pritchard demanded a more ‘radical’ approach to funding the health service and said better-quality buildings and technology were needed to boost productivity.

She warned health chiefs ‘can’t keep asking’ for more taxpayers’ cash and admitted much of a £25.7billion increase in NHS funding had already been spent on pay.

The NHS England chief executive was challenged over the health budget rising from 26 per cent of all Whitehall spending in 1998-99, to 43 per cent in 2022-23.

In October last year, Chancellor Rachel Reeves announced a £22.6billion increase in the day-to-day NHS budget for this year and next year.

This was accompanied by a £3.1billion boost to the NHS capital budget, which is used for research and development, and for investments in buildings and equipment.

Asked if Ms Reeves would need to spend even more on the NHS in future years, Ms Pritchard told the BBC: ‘We need to make absolute best use of the money we’ve got.

‘And we’re really clear that we need to live within our means this year. So that means that focus on productivity is absolutely crucial.

‘But if I could just talk about capital for a second, because that’s the other thing that we need to get right.

‘To be really productive and to provide really high-quality modern healthcare, we need high-quality modern buildings and we need the technology.

Amanda Pritchard, pictured with Health Secretary Wes Streeting last month, demanded a more ‘radical’ approach to funding the NHS

The NHS England chief executive was challenged over the health budget rising from 26 per cent of all Whitehall spending in 1998-99, to 43 per cent in 2022-23

The NHS England boss added: ‘In the current financial context, we can’t keep asking the Government for more state funding – we’re not going to fill the gap that way.

‘We need to think much more radically, particularly about capital. I think we now must consider private capital investment in the NHS.

‘If we don’t fix our buildings, if we don’t fix our technology, we’re not going to get to a place where we can really drive that long-term improvement in productivity.’

Asked about the £25.7billion boost in NHS spending announced by the Chancellor at her Budget in October, Ms Pritchard admitted much of it had gone on salary hikes.

‘So just on that specifically, that’s over two years – half of that money, of course, in this financial year, half in the next financial year,’ she added.

‘A lot of that has gone on pay, spending it on pay awards and dealing with inflation.

‘There are other costs that have hit the NHS, particularly we see growth in demand every year of about 3.5 per cent.

‘I’ve just said it was 7 per cent for A&E but across the board, it’s about 3.5 per cent. No surprise, because we’ve got an older, sicker population.’

Julian Kelly, NHS England’s chief financial officer, last month told MPs that extra cash being ploughed into the health service was mainly meeting ‘basic cost pressures’.

He outlined how a planned 2.8 per cent pay rise for staff, Labour’s hike to National Insurance contributions, non-pay inflation, and new drugs had added to costs.

Mr Kelly admitted, due to the rising costs, an increase in NHS funding for 2025/26 would not be able bankroll ‘lots of new activity to meet basic demand’.