Government health spending needs urgent improvement
New figures from the Office for National Statistics (ONS) reveal that Government-financed healthcare spending was around £239bn in 2023 – a real-terms decrease of 2.1%. That seems to undermine the Government’s claim of ‘record funding’ last year, and its new manifesto commitment to increase NHS spending above inflation every year. The ONS’ new “UK Health Accounts” report also reveals a government healthcare expenditure decrease by 0.7% in nominal terms and by 5.5% in real terms between 2021 and 2022.
At the launch of the 2023 NHS England Mandate last June, the then-Health Secretary Steve Baker said: “The Government has made up to £14.1 billion available for health and social care over the next 2 years, on top of record funding to improve elective, urgent and emergency, and primary care performance.” That pledge does not seem to have been entirely achieved.
Of course, last year’s inflation rise made things worse. In fact, total healthcare expenditure (both Government and private) increased by 5.6% in nominal terms in 2023 but decreased by 1.4% after adjusting for inflation. This was the second consecutive year of negative real terms healthcare spending growth following a 4% decrease in 2022.
The Conservatives’ new manifesto details an NHS Long-Term Workforce Plan that will help shift care away from hospitals and into local communities. To support this, they will expand Pharmacy First, including for menopause support, contraception and treatment for chest infections, freeing up 20 million GP appointments a year.
That appears to be an excellent policy. Pharmacies should be empowered to offer many more services. However, many community pharmacies say that they are receiving insufficient renumeration for these new services at a time when they are increasingly stretched. Furthermore the role of pharmacies as points of initial clinical contact remains somewhat unclear within the public sphere.
According to the analysis from the National Pharmacy Association, 177 pharmacies closed between January and April 2024, compared to 116 in the same period in 2023; that’s the equivalent of 10 local pharmacies closing their doors every week on average so far this year. Increasing workload without sufficient renumeration will increase the number of ‘pharmacy deserts’.
Perhaps most concerning of all is the slump in spending on preventative care. This component represented around 8.2% of Government healthcare spending in 2022 compared with 14.1% in 2021. While a portion of this fall reflects the end of Covid measures, preventative care should be central to a national health policy for whichever party wins on 4 July.
While Government-financed healthcare expenditure fell in real terms, private “out of pocket” healthcare spending, which includes hospital treatments, medical goods and other health services and products, accounted for 13.8% of overall healthcare spending or £40bn in 2023. On top of that, voluntary health insurance was 2.5% of overall health spending, or around £7bn.
The fact that consumers are spending money on preventative healthcare items such as vitamins, supplements and off-the-shelf blood tests looks to be a prudent decision in the face of a reduction in Government health spending as a share of GDP. However, it’s preferable that people opt to take these products to help boost their overall fitness and feel in control of their health. Not because they are scared the NHS may no longer be able to guarantee them fuss-free GP appointments and rapid emergency healthcare should they ever need it.
Dr Avinash Hari Narayanan MBChB is London Medical Laboratory's Clinical Lead.
