how is the nhs funded?, spending review process, nhs funding, how is nhs funding broken down?

How is the NHS funded?

By Luke Aldred

​The NHS is mainly funded through general tax and supplemented by National Insurance contributions (NICs). But how is NHS funding broken down? And, how is it spent across the UK?

Breakdown of funding

In April 2003, NICs were increased to boost NHS funding. This enhanced the share of NHS funding coming from NICs (in 2017/18, NICs were estimated to be just under £24 billion), but general tax still accounts for the vast majority of NHS funding (approx. 80%). In addition to this, a small portion of NHS funding comes from patient charges, including prescriptions and dental treatment. In 2018/19, income from patients fees was £1.4 billion, 1.1% of the total Department of Health and Social Care budget. Individual NHS hospital trusts can generate income too, through parking charges and treating private patients.

Spending Review process

The amount of funding allocated to the NHS each year is decided by the government through the Spending Review process, which estimates how much income the NHS will get from user patient charges, NICs and general tax. If the level of funding raised from NICs and patient charges is less than what was predicted, funds from general tax are used to make sure the NHS receives the level of funding it was originally allocated.

How health spending differs between countries in the UK

Historically, health spending per head in the UK has been lowest in England and highest in Scotland. In all four countries, the amount has risen each year until 2009/10, after which patterns changed, reflecting different political decisions made by the governments in each country. In 2014/15, health spending per head across the four UK countries was:

  • Scotland: £2,208

  • Northern Ireland: £2,177

  • Wales: £2,129

  • England: £2,112

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