The riddle of the NHS budget

Is health spending heading for the biggest shock of all? In his regular column, Michael Blastland does the numbers, in seven easy clicks.

Health is protected in England. While spending in most other government departments is being cut, the NHS will get above inflation rises. But what exactly does "protected" mean? Click through the slideshow, then decide.

Graph showing UK defence spending in Cash and in Real terms
To appreciate what makes the healthcare budget unique, you need to understand how spending works in another area, such as defence. Cash spending on defence soared over 35 years. But what goes up may not go up after inflation - the "real terms" line shows spending up, down and up again.
Graph showing UK defence spending in Cash and in Real terms versus GDP
You can also judge spending as a percentage of GDP - that is as a share of the value of all goods and services produced in the UK. On this basis, defence has withered as a national priority for 50 years, on and off. Between the mid-80s and mid-90s, the defence share of the cake halved.
Graph showing UK health spending in terms of percentage of GDP
Now look at health spending. Unlike defence, over 50 years the numbers have risen in cash, real terms and as a share of the GDP cake. It's one of the most striking changes in the post-war state, under both parties. In real terms, health spending has increased 10 times since 1948.
Graph comparing UK health spending against France, Germany, Ireland, Japan and the US
But this hasn't been unique to Britain. It has happened in almost every developed country. Spending more on health is what people tend to do as they grow richer, whether through a state-run NHS, or privately. Populations age, technology improves, expectations rise. But does it stop?
Andrew Lansley, H?ealth Secretary
Yes, according to Health Secretary Andrew Lansley. The line that rose for 60 years - showing health's growing share of the cake - will flatten under his plans. The NHS has been told to save £20bn from existing budgets to pay for all that would once have pushed it higher.
Bar chart showing year on year UK health spending versus percentage of GDP
Those £20bn of savings come from a budget of about £100bn. Real terms rises in the spending review are minimal. So is the healthcare budget protected? Or, with growth sharply curtailed, when growth was the rule, is it facing as hard a future as any?
Graph comparing UK health spending with Sweden and Canada expressed as a percentage of GDP
Still, less NHS growth might be good. Many say it was wrong to "protect" it. The big spending cuts in Canada and Sweden in the 80s and 90s are often held up as examples for Britain. But did they halt the long-term rise of state health of just correct a blip? Judge for yourself.
Image of surgeon
So can the government, and the NHS, deliver on its plans? Health can't grab more cake until it eats it all. Mind you, the US health slice - public/private combined - is nearly twice the share in the UK. Will UK demand follow? Can it be resisted? Or will it find a way privately, if not publicly?
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Below is a selection of your comments

One statistic that seems to be missing from these graphs is the population level in the countries shown. For example, the population of Canada rose from a little over 21 million in 1970 to around 33 million in 2008, a rise of approximately 50%. However, the state health spending went (from your graph) from about 5% GDP to about 7% GDP, a rise of only about 30%. So, while the absolute amount rose significantly, the amount PER PERSON went down quite a lot. I haven't done the figures, but I would suspect that this is the case in most countries. As the population rises, the health spending will inevitably increase, even if the spend per person stays static. This doesn't seem to get mentioned much.

P Arnold, Somerset

Surely the health service is there to provide essential services and not cosmetic surgery etc? The populations in most western nations are ageing, this means that with the need for more treatments as people will have more ailments later in life that the costs will rise. If the costs of medicines and treatments can be kept to minimum and the service provided kept within boundaries that the taxpayer can afford to shoulder then costs can be managed. The NHS will probably not be able to provide care above basic levels of treatment in the future. Anything extra will have to be covered by the patients or insurances.


The government and the public must make a decision about what they value, what they want and what they can afford. The NHS should be free to treat people in need but those who abuse it should have to pay, so if as a result you get intoxicated and do something stupid the taxpayer should not pick up the bill the individual should pay for his/her treatment, if you assault someone you should pay for that treatment. The NHS is limited in its funds/resources and we are going to have to make tough decisions for the future. Why shouldn't we pay to see GPs or access other services. I also think its a mistake giving GPs the power to buy services. They are unqualified to do this and a few will only feather there own nests. Privatisation is on its way and we will all end up paying more.

Peter, Cheshire

It doesn't seem all that long ago that Gordon Brown was busy punching the lecturn as chancellor telling everyone about how he was seeing how much money he could throw at the NHS. I am thankful that the coalition government is finally telling the NHS that it needs to sort itself out and make itself more efficient. I fully support the idea of universal healthcare, but I don't support a situation where a determination to maintain universality generates a huge governmental gravy train with no accountability for the fact that it has been sucking up ever more money with few tangible results. Perhaps the NHS can start living in the real world.

Graeme Phillips, London, UK

If only it was all that simple. There used to be two main threads of spending in the NHS, Doctors and Nurses, but about 30 years ago Maggie T invented Hospital and Health Service "Managers". Fair enough - after all most doctors and nurses weren't all that good at budget management and writing supply contracts or employment law. But now a relevant chunk of the NHS budget is NOT spent on patient care, or other patient services - it is used to keep self-perpetuating managers in jobs and in a significant number of cases these managers are not particularly efficient, effective, or good value for money. NHS spending needs better external scrutiny, including by local communities, service users and politicians.

Patrick, Inverness

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