NHS chiefs say care will be rationed without £3bn extra cash

Reeves recently rebuffed a request from Wes Streeting, the health secretary, for £1.3bn in extra funding for this year so that the dramatic reduction in the size and number of ICBs - and associated job losses, which were meant to be completed by Christmas - can finally begin, NHS sources say.

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an imminent rise in the cost of medicines to the NHS.

She offered him only £650m, and said even that was conditional on the Department of Health and Social Care (DHSC) agreeing to absorb the rising cost of drugs.

The chancellor and Streeting are engaged in what one senior NHS figure called “a standoff” over the £1.3bn. But the unknown cost of the higher drug prices has been complicating negotiations, they added.

Whitehall’s behind-the-scenes row over NHS funding “is all in a mess at the moment and needs to be resolved”, the same source said.

The two NHS organisations say the £3bn they are seeking includes more than £1bn to cover ICB redundancy costs, that the five-day strike by resident doctors in July cost £300m and that higher drug prices could mean the NHS paying £2.5bn extra.

Matthew Taylor, the chief executive of the NHS Confederation, said: “The threat from unbudgeted redundancy payments, higher drug prices and renewed industrial action risks derailing progress on key waiting time targets and the wider reforms that are essential to getting the NHS back on track.”