In this briefing we set out our analysis of the funding issues facing the NHS. The briefing prese...
Public spending on health in the UK has risen by an average of 3.7% per year between 1949/50 and 2013/14 in real terms.
This overview accompanies our briefing NHS finances: the challenge all political parties need to face.
Since the NHS was established in 1948, public funding for health care has increased by more than both inflation and economic growth.
Health spending in the UK rose by an average of 3.7% a year in real terms between 1949/50 and 2013/14 (2014/15 prices). During this period, the proportion of UK public spending on health rose from 3.6% to 7.5% of gross domestic product (GDP).
Within this overall increasing trend, health spending in the UK has experienced periods of relatively high and low growth.
The highest rate of growth during any parliament was an average of 8.7% a year in real terms, when spending increased from £75.1bn in 2000/01 to £104.8bn in 2004/05 (2014/15 prices). The lowest averageyearly change in UK health spending since 1955 was a 0.6% increase during the current parliament (up to the end of 2013/14).
Private spending on health care in the UK is relatively small.
Private health spending, which had grown on average by 5.1% a year in real terms between 1997 and 2008, fell by 2.8% a year between 2008 and 2012. The global economic crisis since 2008 has had an
impact on both public and private spending but so far the impact has been greater on private spending. In 2012, private spending made up 16.0% of overall health care spending – the lowest proportion in
more than 15 years (equal with 2010).
Productivity in health care has grown more slowly than that of the economy as a whole.
Between 1979 and 2010, UK health care productivity grew by an average of 1.0% a year. By comparison, the productivity of the UK economy as a whole grew by 2.2% a year.