Key points

  • As a share of GDP, the UK spends far less on capital in health care than comparable OECD countries.
  • In 2016, the UK spent 0.27% of GDP on capital in health care, compared to 0.51% in the OECD
  • Low capital spending has meant NHS Trusts are unable to purchase the newest technology, while also facing a significant and rising maintenance backlog.

In 2016, the UK spent 0.27% of GDP on capital in health care compared to an OECD average of 0.51%. In England, most of this spending is from the capital budget of the Department of Health and Social Care (DHSC). This budget is used to finance long-term spending in the NHS, such as new buildings, equipment and technology.

Apart from a few years between 2007-2009, the UK has been consistently low in this area.

Low levels of capital spending mean the NHS has been unable to purchase new equipment with fewer MRI and CT scanners than international comparators and some NHS Trusts using pieces of equipment far past their expected useful lives. At the same time, the NHS Trusts have seen a rising maintenance backlog, at over £6bn in 2017/18. This is now larger than the total capital budget of the DHSC. More than half of this backlog is categorised by trusts as high and significant risk.

Some of the recent downward trend in capital spending has been driven by five consecutive years of transfers from the capital budget to the revenue budget, which is used to finance day-to-day spending in the NHS.

We estimate that to bring England up to average spending on capital in health care would require approximately £4bn on top of the current DHSC capital budget. The current long-term funding settlement for the NHS does not contain any funding commitments for the capital budget.

 

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