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Expenditure on the NHS has risen rapidly and consistently since it was established on 5th July 1948. In the first full year of its operation, the Government spent around £11.4 billion in today’s prices on health in the UK. In 2018/19 the figure was over ten times that amount at £152.9 billion. Growth in health expenditure has far outpaced the rise in both GDP and total public expenditure; each increased by a factor of around 4.8 over this period.

The average annual expenditure increase since 1958/59 is 3.9%. However, between 2000/01 and 2004/05 average annual spending growth was 8.7% which is higher than at any other time in the history of the NHS. 

Responsibility for health services is devolved to the Scottish, Welsh and Northern Irish administrations. In 2018/19 health services expenditure per head was highest in Northern Ireland (£2,436 per head) and lowest in England (£2,269 per head).

The focus of this breifing is on the structure, funding process and expenditure of the NHS in England. The structure and expenditure of the UK NHS is described briefly in Section 1. Expenditure in England is dealt with in Section 2.

In 2018/19, NHS England held a budget of £114 billion. The majority of this budget (£75.6 billion) was allocated to Clinical Commissioning Groups (CCGs) according to a population and needs-based formula. NHS England retains around a third of the budget (£38 billion in 2018/19) for the direct commissioning of specialised healthcare, primary care and military and offender services.

In England the largest five-year moving average in real terms spending growth (+8.7%) occurred over the period 1999/2000 to 2003/04.

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