2. How much does the UK spend on health care capital?
24 October 2019
The UK spends significantly less on capital in health care as a share of GDP than comparable countries.
In 2017, the UK spent 0.31% of GDP on capital in health care, compared to 0.51% in similar countries. Aside from the few years between 2007 and 2009, the UK has been consistently below the average since 2000. This is true both of spending as a share of GDP and as a share of total health care spending.
How much spending is needed to bring the UK up to the average?
We estimate that bringing the UK up to the average spending on health care capital as a share of GDP would require approximately £11.2bn in total annual spending. In England alone, this figure would be about £9.6bn. This would include all health care capital spending, including that outside the NHS. However, the overall trend is consistent with the capital budget of the DHSC, as it is the largest contributor to overall capital spending in health care. Closing this gap through the DHSC capital budget would take £2.5bn in additional capital spending this year (see note 1 below).
Within overall health care capital spending, the UK also spends less on equipment and machinery, which includes spending on medical technology, as a share of its total capital spending. In 2017, the UK devoted just 36% of its total capital spending towards machinery and equipment, compared to 48% in other countries (see note 2 below).
While these data are for the UK as a whole, we expect the NHS in England to be the major driver behind these trends because it is by far the biggest contributor to UK health spending. This is also consistent with our previous work examining capital spending in NHS trusts in England.
- Not all spending in the DHSC budget will be reflected in the above chart, particularly R&D. Additionally, there will be private sector spending in the figure. However, we expect the DHSC to be by far the biggest contributor to this spending. For example, per the ONS, in 2017, 79% of total UK health spending was government expenditure.
- These data were estimated from Eurostat data, which relates to a different definition of health to the OECD.
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