Proportion of NHS budget spent on mental health to be cut next year

The proportion of the NHS budget spent on mental health is being cut, health and social care secretary Wes Streeting has admitted to Parliament.

In 2025/26, mental health services will receive £15.6bn which amounts to 8.71% of the NHS baseline funding.

While the mental health budget has increased from £14.9m the previous year, that amounted to 8.78% of the overall NHS budget.

In a statement to Parliament Mr Streeting reiterated the Government’s commitment to mental health investment pointing out that the additional £320m allocated for mental health in 2025/26 was a ‘significant uplift’ in real terms spending.

‘The proportion of spend is almost exactly the same as it was last year, with a difference of just 0.07%.

‘This is because of significant investment in other areas of healthcare. Much of this investment in other areas, such as investment to improve general practice, will also have secondary benefits for mental health care,’ he said.

It comes as the spring budget statement confirmed greater cuts to welfare than had initially been announced. Planned reforms include stricter tests for personal independent payments.

An impact assessment by the Office for Budget Responsibility concluded the reforms could push 250,000 people – including 50,000 children – into poverty.

NHS Providers said they were ‘deeply disappointed’ that the proportion of spending on mental health was falling at a time of ‘soaring demand’ for services.

Saffron Cordery, interim chief executive at NHS Providers, said: ‘It’s time to give mental health the priority it deserves.

‘For years national support and resources for mental health services have lagged far behind what is given to physical health.

‘Lord Darzi highlighted in his recent report to government that mental health accounts for more than 20% of the disease burden but less than 10% of NHS expenditure.’

She added mental health services were facing record levels of demand including for children’s services and ADHD and autism assessments.

‘Also, many NHS mental health services desperately need more national capital investment to modernise outdated buildings and facilities, to give patients safer and more therapeutic surroundings and to give staff better conditions to work in. 

‘The government’s promised 10-year health plan is a golden chance to help mental health services keep improving.’

In his statement to Parliament on mental health spending – a statutory requirement since 2022 – Mr Streeting noted the Government’s commitment to uphold the mental health investment standard, which requires that ICBs spending on mental health grows ‘at least in line with growth in overall recurrent funding allocations’.

‘Ring-fenced funding for mental health will support the delivery of our key priorities, increase the number of children and young people accessing services, reduce local inequalities in access and improve productivity.

‘This commitment will support the delivery of effective courses of treatment within NHS Talking Therapies and increase access to Individual Placement and Support, so we can reach those in most need of support while also supporting the government’s objectives on economic growth.’

He added that real terms growth in budgets would enable the continued rollout of manifesto commitments ‘including recruiting 8,500 mental health staff, modernising the Mental Health Act, providing access to specialist mental health professionals in every school, and creating a network of community Young Futures Hubs’.

Dr Lade Smith, president of the Royal College of Psychiatrists, said the news was ‘a devastating blow to the 1.6 million people with mental illness waiting for care and treatment who are already excluded from plans to bring down NHS waiting lists’.

‘Delays to care put people at greater risk of developing a chronic mental illness which will affect all aspects of their life and could result in them becoming disabled.’

She added: ‘It is illogical that the share of NHS funding for mental health services is being reduced at a time of soaring need and significant staff shortages. Importantly, mental illness affects many young people as they should be entering into the workforce, with 75% of mental disorders emerging by the age of 24.’