The NHS budget and how it has changed

This content relates to the following topics:

Part of The NHS in a nutshell

Article information

  • Posted:Friday 13 March 2020

Made with Flourish

Current funding

Planned spending for the Department of Health and Social Care in England is £140.4 billion in 2019/20.

The majority (£133.3 billion) of this is revenue funding for spending on day-to-day items such as staff salaries and medicines. The remainder (£7.1 billion) is for capital spending on buildings and equipment, which are longer term investments.

Though funding for the Department of Health and Social Care continues to grow, the rate of growth slowed during the period of austerity that followed the 2008 economic crash. Budgets rose by 1.4 per cent each year on average (adjusting for inflation) in the 10 years between 2009/10 to 2018/19, compared to the 3.7 per cent average rises since the NHS was established.  

Recent changes to funding

In July 2018, the Prime Minister announced a new five-year funding deal that would see NHS funding rise by £33.9 billion in cash terms (ie, not adjusted for inflation) by 2023/24 compared to 2018/19, a rate of increase that is closer to, but still lower than, the long term average. This long-term funding deal only applies to services within the scope of NHS England’s mandate, and excludes important areas of the Department of Health and Social Care budget such as capital investment, public health and the education and training of NHS staff.

In the September 2019 Spending Round and March 2020 Spring Budget, the government announced increases to budgets for capital investment, public health and the education and training of the NHS workforce. But funding for these important areas of spending has not been determined beyond 2020/21. These budgets have come under substantial pressure in the past five years, as day-to-day spending on NHS services was prioritised instead. This has led, for example, to cuts in budgets for public health services and rapid deterioration in the condition of NHS buildings and equipment. 

While the new NHS funding deal will ease current pressures, it is not enough to both restore performance against key waiting times standards and deliver widespread changes to services to deliver better care.

Get the latest news from The King's Fund

Subscribe to our newsletters to keep up-to-date with the world of health and social care and hear the latest news and views from The King's Fund.

Learn more