George Osborne has long regarded support for the NHS as the most important aspect of Tory modernisation. For this reason, I think it is highly unlikely that the ring-fence will be removed from around the NHS budget.
But I suspect that the practical, as opposed to symbolic, importance of the ring-fence will be diluted by more and more things being classified as health spending. At a Quad meeting on the Dilnot proposals on social care, George Osborne told Andrew Lansley that the £1.7bn cost of them, which rises to £5bn within 3 years, should be met out of the NHS budget. Lansley resisted this idea. But I understand from senior coalition sources that they expect Jeremy Hunt to be more amenable to it.
For their part, Treasury officials have told civil servants in the Department of Health that they believe that this health ring-fence should only apply to the budget of the NHS commissioning board.
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