Lansley sets out NHS spending plans

Health Secretary Andrew Lansley has said spending on the NHS will rise in real terms - but warned that "efficiency savings" were necessary.

Mr Lansley said Labour's "substantial increase" in health spending over the last decade was "not sustainable for the future".

Liberal Democrats have accepted a Conservative "ring-fence" to guarantee real-terms increases - ie, rises above inflation - in NHS funding every year. These had been criticised by new Business Secretary Vince Cable during the election campaign, who said they would lead to deeper cuts elsewhere in Whitehall.

Mr Lansley told BBC Radio 4's Today programme that Lib Dems had accepted the need for real terms increases and acknowledged that "those will have an impact on other departments".

He said: "We have come together as two parties, each with our own mandate from the General Election, but in order to secure the national interest. And of course that does include action, starting soon, to cut the deficit to deal with the debt crisis. The Conservative Party were very clear that our mandate was that we would not let the sick pay for Labour's debt crisis, that we wouldn't cut the National Health Service."

The Government would "secure the NHS" by ensuring that resources increased each year in real terms, he said.

But he warned: "If we protect the real value relative to the level of inflation in the economy as a whole, it will not protect the NHS from the need to secure efficiency savings and to control pay and prices in the NHS. It may well be true that in the past there has been a substantial increase in pay and prices in the NHS relative to the rest of the economy.

"That is not sustainable for the future. What is sustainable for the NHS is that we deliver efficiency savings in the NHS in the same way as the rest of the public sector. But because of the nature of the demands on the NHS, if we can secure those efficiency savings, we can reinvest them in the NHS to deliver improving outcomes for the public."

Mr Lansley said the Lib Dems had accepted Tory proposals on health spending.

He said: "You can see in the agreement that we've made that's established our Government that they recognise that the NHS resources should increase each year in real terms but those will have an impact on other departments. So we recognise all these things - but is very clear that if we are going to deal with the challenges of health and social care in the future, it would be unsustainable that if at the same time, we were cutting the real value of the NHS budget."