How Much Does the NHS Cost? (A Concise Overview)

Updated on: December 3, 2023
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Written By Dr Ollie

Every article is fact-checked by a medical professional. However, inaccuracies may still persist.

The National Health Service (NHS) costs a lot of money. But, it plays a crucial role in providing healthcare to millions of people across the United Kingdom.

Understanding the costs associated with the NHS is essential to grasp the sustainability of this vital public service and how it may evolve in the future.

The NHS costs approximately £180 billion pounds a year. This is the total budget for the Department of Health and Social Care in England, which then passes just over £150 billion pounds to NHS England and NHS Improvement for spending on health services. This equates to about 10% of total GDP.

Just under 25% of all government spending is used for health and social care (source).

As I’ll explore in this article, funding for the NHS must be adequately balanced to address patient needs while ensuring the service as a whole remains financially sustainable.

How Much Does The UK Spend On Healthcare?

In recent years, the UK has allocated a significant portion of its budget to healthcare services.

The planned spending for the Department of Health and Social Care in England for 2022/23 was £180.2 billion, with £152.6 billion of that amount being directed towards NHS England and NHS Improvement for spending on health services.

Two surgeons performing an operation
The NHS is one of the largest element of the government’s budget

Back in 2020, the total expenditure on healthcare in the UK was estimated to be approximately £269 billion, encompassing both government and non-government spending.

This spike in expenditure was a result of the COVID-19 pandemic.

To put these numbers in context, healthcare spending in the UK typically accounts for about 10% of the country’s Gross Domestic Product (GDP).

This is in line with many other developed countries, where healthcare spending often takes up a sizeable portion of the national budget.

How Is NHS Funding Spent?

Having looked at the total budget for the NHS, these next sections look at the costs of individual elements of the NHS.

How NHS Funding Is Spent Pixel Infographic

Workforce Costs

A significant portion of the NHS budget is spent on staffing costs.

In 2020/21, the total cost of NHS staff in hospital and community health settings was £62.5 billion, accounting for 44 per cent of the NHS day-to-day spending.

This includes salaries, wages, and benefits for paramedics, doctors, nurses, and other healthcare professionals, as well as administrative and support staff.

However, these statistics do not include the salaries of General Practitioners (GPs), who are not directly employed by the NHS, or employees from the Department of Health and Social Care and other national bodies, such as NHS England.

Procurement

Procurement is another crucial area where the NHS spends its budget.

This involves purchasing medical supplies, equipment, and consumables necessary for providing healthcare services.

Procurement spending in 2021/22 was approximately £32.1 billion (source).

The exact amount spent on procurement varies from year to year, but it is an essential aspect of maintaining the quality of care and ensuring the availability of resources.

Non-NHS Healthcare

The NHS also allocates funding for non-NHS healthcare providers, which includes independent and voluntary sector organisations.

These organisations often play a crucial role in delivering specialised services or addressing specific healthcare needs within the population.

One example would be private ambulances contracted to respond to 999 calls in certain areas of the country.

Funding for such providers may vary depending on contracts and agreements but is generally just under £20 billion.

Primary Care

Primary care services, including general practitioner (GP) services, dental care, and community pharmacies, receive a portion of NHS funding.

GPs play a critical role in the healthcare system, offering services ranging from diagnosis and treatment to referral for specialised care.

They often serve as the first point of contact for patients within the NHS and are generally able to provide services at a significantly cheaper cost compared to hospitals.

Prescriptions

Prescription costs also form part of the NHS budget, covering the expenses related to medications prescribed by healthcare professionals.

A pharmacist reaching for medication off a shelf
The UK prescription charge is £9.65 per item

Although non-entitled patients pay a prescription charge, this often doesn’t go anywhere near covering the costs of the medication itself.

These costs include the purchase of medicines, reimbursement to pharmacies, and subsidies for patients with exemptions or discounts on prescription charges.

Estates

The maintenance and development of the NHS estate, including hospitals, clinics, and other healthcare facilities, require substantial investment.

Funding is allocated for the ongoing upkeep, renovation, and construction of these facilities, ensuring that they remain fit for purpose and able to accommodate the growing demands of the healthcare system.

Many NHS facilities have been in use for several decades and, as such, face issues related to outdated design, wear and tear, and obsolescence.

Such conditions not only pose a risk to patient safety but can also negatively affect the working conditions of healthcare staff.

Other Costs

There are several other areas where NHS funding is spent, such as directly commissioned services, local authority grants, clinical negligence claims and clinical excellence awards to name a few.

These costs may also include investments in research and innovation, technology upgrades, and staff training and development.

There are hundreds, if not thousands, of different departments that the NHS spends money, each with an individual budget and aim to improve patient care.

Breakdown Of NHS Costs

Using available data, the cost of certain aspects of NHS can be roughly calculated to give some context to the large overall figures.

What Is The Cost Of The NHS Per Person In The UK?

Considering the UK population, the cost of the NHS per person can be roughly calculated by dividing the NHS’s budget by the number of people in the UK.

In 2022/23, that figure equates to about £2700 per person per year (£180 billion divided by 67 million as the UK’s population).

This amount was around the median for members of the Organisation for Economic Co-operation and Development (OECD), which had an average of £2,913 per person.

As the population varies and the NHS budget varies, the cost per person will of course change year on year.

What’s The Cost Of A Patient Going To A&E?

The cost of a patient visiting the Accident & Emergency (A&E) department varies depending on the complexity of their medical conditions and treatments received.

However, a rough average can be calculated by looking at data regarding total A&E visits over previous years.

In 2022/23, the average cost for a person who visited an urgent care centre and underwent the most basic level of diagnosis and treatment was £86.

On the other hand, for someone who went to a major A&E department and required more intricate examinations and medical interventions, the cost for the NHS was just over £400.

What’s The Cost Of A GP Appointment?

The costs related to GP appointments depend on various factors such as the length of the appointment, location, and any additional services provided during the consultation.

Interestingly, a recent study estimated that, in 2021/22, the average 9-minute GP face-to-face consultation cost £42.

However, GPs can easily spend up to half an hour with more complex patients requiring extensive treatment, so you can easily imagine how the costs related to these consultations would be well above the £42 average.

How Much Does The NHS Cost Per Day?

To calculate the approximate daily cost of the NHS, one can divide the annual budget by the number of days in a year.

Using the planned spending for the Department of Health and Social Care in England for 2022/23, which is £180.2 billion, the NHS cost per day can be estimated as £493.2 million per day.

Keep in mind that this figure is subject to change based on various factors, and only accounts for the budget allocated to England, excluding other parts of the UK.

Cost Comparison With Other Countries

To provide context to the cost of the NHS, we can compare the health expenditure of different countries as a share of their respective GDPs.

According to a report by the Health Foundation, funding for UK public health spending is set to rise from 8% of GDP in 2019 to around 9.4% in 2024 (source: The Health Foundation).

This increase in funding is expected to help the NHS maintain its high standards of care, especially in the wake of the COVID-19 pandemic.

When compared to other countries, the UK’s healthcare spending is relatively low.

In 2020, there was a big increase (14%) in spending in response to the pandemic.

However, even with this increase, the UK still spends less on healthcare than other countries such as Germany, France, and Italy.

Operating instruments on a table
The NHS is actually relatively efficient compared to other national health services

It is important to note that healthcare spending is not the only factor that determines the quality of care.

The UK’s NHS is often praised for its efficiency and accessibility, despite its lower spending compared to other countries.

However, as the demand for healthcare services continues to increase, it is crucial that the NHS receives the necessary funding to maintain its high standards of care.

What Are The Long-Term Trends Of NHS Costs?

The cost of the NHS in the UK has been increasing over the years due to various factors such as population growth, ageing population, and advancements in medical technology.

In the early years of the NHS, funding was comparably low, but as the nation’s healthcare needs evolved, so did the expenses associated with operating the National Health Service.

One noteworthy trend in NHS costs has been the growing proportion of the budget allocated to staff salaries.

Another significant trend is the overall increase in the NHS budget itself.

According to the Institute for Fiscal Studies, planned health spending in England will rise by an average of 3.5% per year up to 2024-25.

The COVID-19 pandemic also increased the cost of running frontline NHS services by £4-5 billion a year.

These costs are in addition to other key financial factors, such as the need to fund capital investment and recover care backlogs, which will continue to have an effect over the coming years.

Long-term trends in NHS costs suggest that financial pressures may continue to rise as a result of ongoing challenges and increasing demand for services.

The government has committed to increasing funding for the NHS, but it remains to be seen how sustainable these funding levels will be in the long term.

How Health Spending Is Funded

The NHS is primarily funded through general taxation and National Insurance contributions.

Unlike healthcare systems that rely heavily on private insurance, the NHS is designed to offer medical services that are free at the point of use for residents.

The money collected via taxes and National Insurance goes into a central fund, which is then allocated to various healthcare services across the country.

Each of the four nations of the UK—England, Scotland, Wales, and Northern Ireland—has its own system of public and publicly funded private healthcare, each with its own set of policies and priorities.

Special budgets are also sometimes allocated for specific needs, such as public health campaigns or emergency responses to situations like the COVID-19 pandemic.

While the NHS does charge for certain services, such as prescriptions, dental care, and eye tests in England, these charges make up a relatively small portion of its income.

You can learn more about how the NHS is funded here.

Final Thoughts

Understanding the financial landscape of the NHS is a complex endeavour that requires a nuanced look at various factors, ranging from government allocations to unforeseen global crises like the COVID-19 pandemic.

With an annual budget that exceeds £180 billion in England alone, the NHS stands as a monumental investment in public health.

Policymakers face the ongoing challenge of balancing increasing expenditures with maintaining high standards of care.

The critical takeaway is that the cost of the NHS is not just a line item in a budget; it is a reflection of societal priorities and values, particularly the UK’s collective commitment to ensuring that quality healthcare is accessible to all, regardless of their financial circumstances.

About the author
After studying medicine at the University of Leicester, Dr Ollie now works as a junior doctor in London. His interests include medical education and expedition medicine, as well as having a strong belief in the importance of widening access to medicine.