Budget 2012: NHS savings of £500m helping to fund 50p tax cut, says Labour The net effect is a £500 million reduction in health spending over the two financial years, 2011-12 and 2012-13. The figures were unearthed by the Health Service Journal and the Nuffield Trust, a health think tank. Anita Charlesworth, the chief economist at the trust, said that the money was being taken back by the Treasury even though several NHS trusts were running at a loss. "It seems that £500 million of the savings are not going to be reinvested in new models of service delivery but will instead be channelled towards central government deficit reduction," she said. Ed Balls, the shadow chancellor, said that the Coalition was breaking its promises to protect health spending. He likened the change in spending to the so-called granny tax slipped out in the details of the Budget during the week. "The tax grab on pensioners was not the only hidden bombshell in the Budget," Mr Balls said. David Cameron and George Osborne have silently taken half a billion pounds from the National Health Service. The Government promised any savings would be reinvested in the NHS. Now we know the truth - the NHS front line is taking a hit to pay for tax cuts for millionaires. A Government source insisted that the overall health budget was still rising in real terms, and that the clawback was a natural part of managing a budget of more than £100 billion a year. The source said that while some money saved had been reinvested in treatment facilities for patients, not all savings on capital projects could be reused in the same way. A spokesman for the Department of Health said that the money had been reclaimed by the Treasury after it was saved on projects like computer systems. He said: "The majority of the underspend is from the capital budget - mainly from savings on IT systems and better management of budgets. We have already taken advantage of HM Treasury's budget exchange scheme and transferred the maximum amount of the capital budget into 2012-13.