Committee publication · Correspondence · 20 May 2026
Correspondence from the Permanent Secretary- Supplementary Estimate 2025-26
Summary
The Permanent Secretary of the Department of Health and Social Care responds to Health and Social Care Committee scrutiny of the 2025-26 Supplementary Estimate. She addresses concerns about £1 billion in depreciation and impairment drawdowns, commits to improving transparency of NHS England budget lines in future estimates, outlines support for three strategic shifts (hospital to community, analogue to digital, sickness to prevention), proposes annual reporting on pharmaceutical spending commitments, and confirms NHS Pension Scheme documentation will be provided.
Key findings
- Supplementary Estimate includes £1 billion drawdown from reserve: £816 million for depreciation, £200 million for impairments, reflecting updated asset valuations and reassessments received later in the year
- Department acknowledges that aggregating spending under single 'NHS England' line limits parliamentary visibility; forthcoming DHSC-NHS England merger provides opportunity to reconsider Estimate structure with HM Treasury and Scrutiny Unit
- Funding supports three strategic shifts: hospital to community, analogue to digital, and sickness to prevention through community services, digital transformation, and preventative health investment
- Department proposes annual reporting to Committee on 'New Medicines' spending against UK-US trade agreement commitment to increase from 0.3% to 0.6% GDP by 2036, noting medicines expenditure will vary year-to-year
- Departmental strategic plans will be published Spring 2026 through centrally coordinated cross-government process; NHS Pension Scheme explanatory memorandum sent 14 April by NHSBSA
Government position
Department accepts Committee scrutiny and partially accepts transparency concerns. While defending current Estimate aggregation as consistent with accounting standards and HM Treasury guidance, it commits to exploring improved transparency through the upcoming DHSC-NHS England merger. Proposes alternative monitoring mechanism (annual pharmaceutical reporting) rather than embedding detailed breakdowns in Estimates themselves, citing UK-wide agreement scope versus England-only Estimate reporting.
Tone
ProceduralTopics
Key actors
Samantha Jones, Layla Moran, Department of Health and Social Care, NHS England, HM Treasury, House of Commons Scrutiny Unit, NHS Business Services Authority
Notable line
“The forthcoming merger of DHSC and NHS England provides an opportunity to reconsider the structure of the Estimate.”
Key Quotes
“The Supplementary Estimate includes a drawdown of just over £1 billion from the reserve in respect of non ‑ cash depreciation and impairments.”
“I recognise the Committee's concern that the aggregation of spending within a single "NHS England" line limits external visibility of how resources are allocated across the Department's programmes.”
“The Department is now rebalancing its budget to support the Government's strategic shifts: from hospital to community, from analogue to digital, and from sickness to prevention.”
“We therefore propose to write to the Committee annually with an update setting out (i) the Department's outturn spend on 'New Medicines' and (ii) the proportion of GDP that this represents.”
Source · parliament.uk record ↗