Responding to the Health Foundation's analysis showing that the NHS budget is being squeezed by inflation and population growth Mathew Taylor, chief executive of the NHS Confederation, said:

“This new analysis confirms what health leaders feared, that the promised revenue boost will barely touch the sides against the backdrop of significant deficits and pressures across NHS services.

“With the triple threat of ongoing industrial action, long waiting lists and uncertainty over staff pay hanging over the NHS it means 2024/25 is going to be an incredibly tough year for services and patients.

“The additional £3.4 billion investment in technology is very welcome. But even if this truly is new money it amounts to £700 million a year, much less than the extra £6.4 billion in capital funding a year we have been calling for to repair crumbling estates and invest in the latest digital technology and equipment.

“NHS leaders and their teams will move heaven and earth to try to hit the 2% productivity growth target and there are great opportunities that can be built upon if the NHS is given the right support. But we are worried that without additional capital investment it will not be possible to manage growing demand or recover performance.

“The risk is that the government has set funding and performance expectations on a productivity improvement that the NHS will simply not be able to meet with the resources it has been given.”