08/11/2017



NHS and social care funding: the outlook to 2021/22




This chart looks at how this has changed over a rolling ten year period. As recognised by the NHS’s Five Year Forward View, by 2020 the NHS will need to find savings of around £22 billion in order to balance it... In 2018/19, the figure was over ten times that amount at £152.9 billion.

Five reasons why the Chancellor must find extra cash for the NHS at the budget

This report examines what can be expected once the current unprecedented period of broadly flat NHS funding in real terms ends in 2014-15. Such growth is not out of line with the history of NHS spending – indeed, somewhat below the 4% or so per year long run average. A year later the NHS laid out plans for how it might handle this gap.

With the news this week of extra money for NHS staff pay rises , perhaps we are seeing the first signs of a change of direction in funding – one very likely to be welcomed by the public, whose concern about the NHS has grown over the last few years. Some of the sharp increases in spending as a percentage of GDP are arithmetical – when GDP growth is low or falling (as in recessions).



Expenditure on the NHS has risen substantially since it was established on 5th July 1948. 05/08/2016



Subsequent falls in the ratio following recessions are partly the reverse (with GDP growth accelerating), and partly deliberate policy as public spending is squeezed. 04/07/2012 In 2013, NHS England said it faced a funding gap of £30 billion by the end of the decade, even if government spending kept up in line with inflation. The tightest period of funding in the last 50 years was during the period from 1975/76 to 1979/80 (average annual real growth of 1.3 per cent).

Funding and sustainability Funding for the NHS in the UK has risen by an average of 3.7% a year in real terms since it was introduced in 1948. The left-hand axis measures real-terms spending (in £ billion). This interactive chart shows how spending on the NHS in the UK changed between 1949/50 and 2010/11. The tightest four-year period of NHS funding was during the period 1950/51 to 1954/55 (an average annual real cut of 2.4 per cent). On current projections and NHS spending plans, between 2009/10 and 2020/21 spending will have fallen by around 0.5 percentage points of GDP – to 7.1%.After 11 years of NHS spending falling as a share of GDP, what would it take to reverse this trend?Just getting back to spending of 7.6% of GDP over the next three years would require a real increase in funding of £15.1 billion – £11.4 billion more than current plans – and equivalent to an average annual real increase of 3.3%, rather than the 0.8% currently planned.
In real terms, after adjusting for inflation, NHS spending in 2020 is likely to be 10 times as much as in 1950.Around half of this increase in spending was and will be funded by economic growth – by 2020 the UK’s GDP will be around five times larger in real terms than it was in 1950. The rest of the increase is the result of government decisions on priorities across all public spending. After last week’s Spring Statement made no immediate tax and spend promises, John Appleby looks at the history of NHS spending and the recent trend of it falling as a share of GDP, while suggesting we might be seeing the first signs of a welcome change of direction.




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