The Department of Health and Social Care’s capital budget is used for research and development, and for long-term investments in building and maintaining NHS land, facilities and equipment such as MRI or CT scanners.
Capital investment accounts for a small share of total health spending (slightly more than 5% in 2022/23) but is essential to delivering high-quality care using facilities and equipment that are up to date and in good condition. During the Covid-19 pandemic, the capital budget also included spending on the NHS Test and Trace programme.
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Over the past 15 years, levels of capital investment have changed dramatically. From 2014/15 to 2019/20, funds from capital budgets were transferred to support day-to-day spending and relieve the growing pressures in the NHS. However, this came at a cost as some NHS buildings and equipment fell into increasing disrepair, with rising numbers of patients experiencing safety incidents caused by estate or infrastructure.
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Capital budgets are now set to rise to £11.7 billion in cash terms by 2024/25. Part of the planned increase to capital investment is tied to new national programmes to build or upgrade hospitals, surgical hubs and community diagnostic centres, and to increase spending on digital technology and research and development. However, with financial pressures on the NHS increasing, capital budgets are once again being reallocated to support day-to-day spending.
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