That brings me—finally, on public spending—to the Government's plans for the health service. With inflation so much lower than expected this year than last, it would have been perfectly possible for us to reduce our previous plans for health and still to meet our manifesto commitment to real growth in resources for the national health service each year. Due to the high priority that we give to the national health service, we have decided not to claw back the unexpected provision in this way. Instead, the health service will keep the unplanned bonus that it has had this year from lower inflation. I shall spell out what that means. Next year, spending on the national health service will grow by £1.3 billion. That is 1 per cent. growth in real terms against the ½ per cent. increase that we originally allowed for in last year's Budget. It will come on top of a real increase of 3¾ per cent. this year because of the drop of inflation.
So, in addition to the extra money from the taxpayer, the health service continues to benefit from the improvements in performance flowing from the Government's reforms. Further improvements in efficiency are expected to release at least £600 million extra for patient care next year. All those savings, including gains from rationalising management and administration costs throughout the Department and throughout the national health service, are ploughed back into patient care. Those extra funds, on top of the extra provision that I have announced, which are achieved from savings coming from a variety of measures, have only one thing in common. All those savings— therefore all the extra funds—have so far been opposed by the Labour party.
All this—the extra provision and the savings—means that next year we shall all benefit from an even better financed health service, which has seen real increases in spending on it by the taxpayers in every year since the Government took power. It will be delivering even better standards of patient care, with further improvements in patients charter standards, and more progress in reducing waiting times.