Intended for healthcare professionals


70 years of NHS funding: how do we know how much is enough?

BMJ 2018; 361 doi: (Published 14 June 2018) Cite this as: BMJ 2018;361:k2373
  1. Anita Charlesworth, director of research and economics1,
  2. Karen Bloor, professor2
  1. 1The Health Foundation, 90 Long Acre, London WC2E 9RA, UK
  2. 2Department of Health Sciences, University of York, York YO10 5DD
  1. Correspondence to: K Bloor karen.bloor{at}

Although taxation is arguably the most efficient funding mechanism, NHS expenditure is a political choice, say Anita Charlesworth and Karen Bloor

In his landmark 1942 report, William Beveridge said that a comprehensive health service would “diminish disease by prevention and cure”1 and that costs would consequently be relatively stable. This optimism was unfounded, and vast unmet need took doctors and policy makers by surprise in the early days of the NHS. The first winter crisis was in 1948, and substantial overspends in the NHS’s first two years alarmed the Treasury. Responses included introducing user charges for optometry and dentistry, which prompted Aneurin Bevan’s resignation, and commissioning the Guillebaud committee to investigate NHS costs. “Rolling crises”2 have characterised debate about NHS funding ever since, often accompanied by lobbying not just for increased spending but for increased user charges and diversity of funding streams.3 There is no right answer to the level of NHS funding, but we can approach the debate in several ways.

How does the NHS compare?

The UK spends around 10% of its gross domestic product (GDP) on health.4 The proportion of GDP spent by government on health has doubled since 1948.5 Most other industrialised countries have also seen rapid and sustained growth in health spending, exceeding inflation and economic growth, irrespective of their funding systems (tax, social insurance, or private insurance) (fig 1).6 The UK’s increase in expenditure has exceeded what would be expected from increasing overall national wealth.

Fig 1

Growth of real health spending and GDP per capita in OECD countries (2000-15)

UK health expenditure has increased by almost 4% a year in real terms over the lifetime of the NHS.5 Real per capita spending was £268 in 1949-50, increasing to £2273 by 2016-17. But spending has been volatile, driven by both political ideology and …

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