In this briefing we set out our analysis of the funding issues facing the NHS. The briefing prese...
How much is spent on the NHS in England and how has this changed over recent years?
This overview accompanies our briefing NHS finances: the challenge all political parties need to face.
£112bn was spent on the NHS in England in 2013/14. This is the highest it has ever been.
So far, spending on the NHS in England has risen by an average of 0.7% per year in real terms over this parliament (2009/10 to 2013/14). This is lower than the average rate of increase for the UK of 3.7% a year in real terms since the NHS was created in 1948.
Spending on the NHS in England is planned to rise by 1.1% in 2014/15 and 1.3% in 2015/16, in real terms. Following the Autumn Statement 2014, planned expenditure for 2015/16 is £116bn in cash terms. This is £3.1bn more than expenditure in 2014/15 (see table 1 and figure 3).
The NHS budget is under increasing strain. More than half of all NHS providers (hospitals, mental health trusts, ambulance services and community health services) were in deficit at the end of September 2014, with a total net shortfall of £630m.
The biggest problems are being seen in acute hospitals, which are experiencing increasing costs and lower efficiency savings. Among acute hospital providers, 81% report a deficit, resulting in a net shortfall of over £700m.
NHS administration costs fell at an annual average of 13.5% in real terms between 2009/10 and 2013/14, dropping from £5.6bn to £3.1bn. This was a result of the 2010 Spending Review, which mandated the Department of Health to reduce administration costs by one third by 2014/15 against a 2010/11 baseline.
Funding for secondary care services (hospitals, mental health and community nursing) has increased at a faster rate than for primary care. Between 2009/10 and 2012/13 funding for general practice fell at an average annual rate of 1.3% in real terms, while funding for hospital services increased at a rate of 2.0% in real terms. This is despite government efforts to move care out of hospital.
NHS spending on care supplied by non-NHS providers (private, voluntary and local authority organisations) has risen by an average of 6.2% a year in real terms between 2009/10 and 2013/14. Services purchased by NHS commissioners (primary care trusts, NHS England and clinical commissioning groups) from non-NHS providers rose from £8.2bn in 2009/10 to £10.4bn in 2013/14 in real terms.