Investment in health services in 2010-11 will increase by more than 5 per cent, Chancellor Alistair Darling has confirmed.
The investment will be accompanied by an additional £5bn of efficiency savings, on top of the planned £30bn in the same period, Mr Darling said in his Budget speech this afternoon.
He said: ‘We will protect investment in schools, hospitals and other key public services – and we will work to rebuild our financial services.’
Budget decisions had been guided by the ‘core values of fairness and opportunity – and our determination to invest and grow our way out of recession,’ he said.
He forecast the economy would grow by 1.25% in 2010 and 3.5% after 2011.
In future years he said the economy would recover to grow at around 2.75 per cent.
Inflation is expected to continue ‘coming down sharply’, reaching 1% by the end of this year.
Retail price index inflation is forecast to remain negative, falling to –3% by September, before moving back above 0% next year.
Mr Darling said despite the tough economic conditions in the world economy, cutting public services would be ‘the wrong thing to do’.