The data highlights some notable trends in the UK. To cope with increasing demand for health care, the UK has been expanding its workforce. The value of health care capital, however, has not increased, leaving each health care worker with significantly less capital to work with than previously. This trend is driven by the UK spending significantly less on health care capital as a share of GDP than other countries.

As we noted earlier, we expect most of this trend to be driven by the capital spending of the DHSC in England. At present, substantial increases in the DHSC’s capital budget following announcements of new funding are only for this year and next, and still represent far less than the average annual capital spending of other countries as a share of GDP. 

DHSC has outlined a vision for the NHS as a world leader in health technology, yet the UK is spending less on capital than most other countries and a lower proportion of its capital on machinery and equipment. As a result, the value of machinery and equipment per worker in health care in the UK lags far behind other countries – less than a fifth of the value in Austria.

While some of the differences could be driven by measurement differences or price levels between countries, this would not explain the declining values within the UK (see note 1 below). Also, data on specific medical technology (such as MRI and CT scanners) shows that the UK has far fewer of these items per capita than most comparable countries, indicating that these trends are not driven by price differences but rather, by the amount of capital.

Increasing capital per worker is not always a good thing – it is the type of capital per worker that matters. Increasing the amount of capital in health care will also require changes in the workforce. For example, becoming a world leader in health care technology requires substantial capital investment, but also investment in the workforce to build the capability to make use of the technology. There are also other costs to consider, such as the cost of preserving capital through maintenance.

While we have noted the limitations in international comparisons of capital in health care, they do provide enough evidence to support further debate about the level of capital and capital spending in the UK compared to other countries. For example, the age of NHS estates and equipment could explain some of the difference in the value of capital between the UK and other countries – buildings and equipment decline in value as they get older. The UK has a comparatively old health care estate. This in part reflects the country’s long history of health care provision, but also reflects long periods of relatively low investment in new facilities, with the associated consequences for patient care.

Where next?

Country-level trends do not necessarily suggest that the UK must raise its capital to levels of high-spending countries like Austria and Denmark. Nor do they give us the detail of where capital is lacking or where new funding should be allocated – for example, to primary care or hospitals.

Rather, they highlight the need for us to gain a better understanding of why there are differences between the UK and other countries and what the implications are for health care staff and the care that patients receive. While international comparisons can provide a useful guide to the shortfall in health care capital investment in the UK, spending decisions should be driven by a clear assessment of the needs of local health care systems.

Our previous research highlighted many of the problems with capital and capital funding in the UK. Years of underinvestment in capital have left the NHS in England with many issues, such as a rising maintenance backlog in NHS trusts, a lack of up-to-date medical equipment and scanners, and ageing estates and IT infrastructure.

Leaders in NHS trusts have highlighted the impact that the capital environment is having on staff productivity and morale, and the very real risks to patient care and safety. Much of this has been the result of underinvestment and a culture of short-termism – for example, the repeated raiding of the capital budget to fund front-line services.

These comparisons show that the UK is falling behind other countries on capital in health care. While recent funding announcements of additional capital spending for the NHS in England will provide welcome relief to the areas receiving funding, a long-term capital settlement is clearly required to address the wider problems. The capital budget must be considered alongside the revenue budget to ensure that staff have the right mix of resources they need to deliver the best quality care to patients.

  1. This is true unless prices are falling in the UK on medical equipment and technology while rising everywhere else. We do not expect this to be the case.

Further reading

Briefing

Failing to capitalise

A report outlining how short-term thinking has resulted in years of inadequate capital spending for the NHS in England, riski...

Briefing

Investing in The NHS long term plan

A briefing analysing the challenges for health and social care following the publication of the NHS long term plan, including...

6/6 pages
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