The NHS has been widely regarded as one of the most efficient healthcare systems in the developed world. For example, a study comparing the healthcare systems of 11 countries between 2011 and 2013 found that the NHS scored highest on quality, access and efficiency ( This is despite the UK spending less on its health care (7.3% of UK GDP) than many other European countries (

However, if the UK is a relatively low spender on health care, it’s likely to sink to 6.7% of GDP in 2020/21 and go even further down the international league tables as we are experiencing the biggest sustained fall in NHS spending in any period since 1951.

The total health budget is rising by £4.5bn in the years 2015 -2020, an increase of less than 1% a year above inflation.

“This means real terms health spending per person will be broadly the same by the end of this decade as it was at the start – despite the growing needs of an ageing population.”’s-spending-review

This means that both our access to NHS services and the quality of care provided will be at risk because of insufficient funding (

At the same time that funding is getting tighter, the NHS has to cope with:

  • The annual transfer of NHS funds to the Better Care Fund (£3.8 billion from 2015). This Fund was set up to support the integration of health and social care, largely by cutting hospital care for those who are chronically ill and the frail elderly and replacing it with supposedly cheaper care in the community;
  • A cut of £200 million in Local Authority public health budgets which fund many services such as school nursing, screening programmes, and smoking cessation programmes – despite recognition by the boss of NHS England of the need for “a radical upgrade in prevention and public health”.  This cut will not only affect preventative and public health services but will also have a serious knock on effect on NHS healthcare services.(;
  • A cut in the money paid by the government to NHS providers for their work under the Payment by Results system from 2010/11. Over three-quarters of each hospital’s funding has come from this system through which hospitals are paid per treatment, according to prices set by a tariff. In recent years, payments have been cut by over 40% for a quarter of the treatments that hospitals provide ( So, for example, a hospital providing routine knee surgery would have been paid £3,077 for each procedure in 2009/10, but by 2013/14, the hospital would have received £1,673 for the same procedure.

Cuts to tariff payments made up nearly half of the £20 billion ‘efficacy savings’ that the NHS was told to achieve by 2015 under the ‘Nicholson Challenge’, dreamed up by the last Labour government and included in the NHS funding settlement agreed by the Coalition Government when it came to power.

In August 2017, the Chair of the Commons Select Committee, Conservative MP Sarah Wollastone, called for a major increase in funding for health and social care – to 12% of GDP. And in November 2017, Simon Stevens (CEO of NHS England) acknowledged that the NHS is currently underfunded by £20 to £30 billion a year, with what ‘growth’ there has been in funding due to nose dive over the next couple of years.

Others expressing concern over the state of NHS funding include the Care Quality Commission, NHS Providers, the Health Foundation, NHS Confederation, the National Audit Office, the Royal College of Physicians, the Royal College of Surgeons, the Royal College of General Practitioners, and the Royal College of Nursing, the King’s Fund and Nuffield Trust.

To find out how much funding your local NHS will get compared to what it needs; and what you can do about this, visit

See also our page on Cuts, the Five Year Plan and STPs.

Further reading

For information about government funding for the NHS see

Francis R (2013) Report of the Mid Staffordshire NHS Foundation Trust public inquiry.

For an argument on how the ‘need for austerity’ is being used as a strategy for introducing rapid social change, not least dismantling the welfare state, see

For an explanation of NHS payment systems, such as Payment by Results, see

updated November 2017

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