Read our full briefing, Failing to capitalise.

What is capital spend?

The capital budget of the Department of Health and Social Care (DHSC) is used to finance long-term spending in the NHS, such as new buildings, equipment and technology. It also covers research and development, and some maintenance and upgrades to keep everything running smoothly.

Capital spending is a critical input in health care, with new technology able to transform services and improve workforce productivity.

How much does the UK spend on capital?

Comparable international data is only available for the UK. It shows that the UK has very low levels of capital spending on health care. As a share of GDP, we spend significantly less on it than most other Organisation for Economic Co-operation (OECD) countries.

For the UK to move up to the average for OECD countries, capital spending would have to almost double as a share of GDP.

How does low capital spend affect health outcomes?

Low levels of capital spending have meant the NHS has been unable to purchase new equipment, which may contribute to our poor performance on outcomes compared with similar countries. 

The UK has the lowest level of both CT and MRI scanners per capita among similar countries. These scanners are vital for screening people’s symptoms and helping to catch conditions, including cancer, at an earlier stage. With our cancer survival rates lagging behind comparable countries, investing in this equipment is vital.

Why has capital spending in health care been declining?

For a long time, funding pressures and growing demand have been piling pressure on the NHS. To cope, money has been transferred from the capital budget to the revenue budget, which covers day-to-day running costs.

But by not investing in capital today, we are storing up serious problems for the future. The NHS has been left with a maintenance backlog of over £6 billion, with over half made up of 'high' and 'significant' risk.

What does this mean for the future?

The NHS Long Term Plan sets out big ambitions for the NHS in England to deliver world-class care for major health problems such as cancer and heart disease. And the Department of Health and Social Care (DHSC) has proposed a more technology- and data-driven NHS.

Capital, such as technology and IT, must be a key component in transforming NHS services.

However, without a long-term and substantial commitment to capital funding, we won’t be able to keep our existing infrastructure in good working order – let alone deliver the vision for a transformed NHS.

Further reading

Briefing

Failing to capitalise

March 2019
Briefing

A report outlining how short-term thinking has resulted in years of inadequate capital spending for...

Blog

Squeezed budgets, leaky roofs and rationing

8 March 2019
Blog

Is the failure to maintain and invest in NHS infrastructure squeezing trusts to breaking point?

Press release

Lack of investment in NHS infrastructure is undermining patient care

8 March 2019
Press release

A new report by the Health Foundation concludes that a short-termist approach has resulted in years...

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