How much are we spending on health?

Before the October 2024 Budget, UK government spending on health was high, by various measures, but there were also good reasons to believe that it was not high enough to meet demand.

This explainer is one of a series Full Fact is publishing exploring a range of key political topics. This is a short version written ahead of the Autumn Budget and we’ll be expanding it in due course. This article was last updated on 29 October 2024 and the information in it is correct as of then.

High spending

In a report published in September 2024, the Office for Budget Responsibility (OBR) said: “Public spending on health has taken up an increasing share of GDP, tripling from 2.8 per cent in 1955-56 to 8.3 per cent in 2022-23, after rising to an all-time high of 10.5 per cent during the pandemic.”

The same report shows that real-terms health spending in England had tended to rise every year, before jumping by a third during the pandemic and settling at around £190 billion more recently.

This only covers health spending in England, which is the part of the health service that the UK government controls. As the OBR says: “Devolved spending represents around 20% of overall UK health spending, with analysis suggesting that spending in the devolved nations has been consistently slightly higher on a per-person basis than it has been in England over the past couple of decades.”

But how much is enough?

This point about per-person spending is important, because the scale of government health spending should be seen in the context of how much spending the nation actually needs. In particular, a growing and ageing population requires health budgets to rise just to keep them as healthy as before.

In a report published before the October 2024 Budget, the health think tank the Nuffield Trust estimated that there was a £4.8 billion funding shortfall in NHS England, and said that this would require “a real-terms headline increase to [the Department of Health and Social Care’s] 2023/24 revenue budget of at least 3.6% just to keep the NHS on an even keel”.

Analysis by both the Institute for Fiscal Studies (IFS) and the Health Foundation, another health think tank, suggests that rises in health spending have been much smaller when you adjust for the changing size and age of the population.

When thinking about government spending on health, it’s important to remember that private healthcare also makes up part of the picture, and that this changes over time as well.

Comparisons with other countries

Another way to consider whether ‘enough’ is spent on health is to compare it with other countries. These comparisons look at the whole UK, rather than England only.

In this respect, the UK spends a fairly high proportion of its GDP on healthcare (11.3% in 2022), when compared to similar countries by the OBR—but still a fairly small amount per person.

As the OBR says: “The fact that the UK has, in the latest data, total health spending as a share of GDP above the advanced-economy median, but one of the lower levels of health spending per-person among this group of countries, reflects the UK’s lower GDP per-person relative to most of the [other] countries.”

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