Healthcare - Funding

Spending on the NHS 2010-present

The NHS was widely regarded as one of the most efficient healthcare systems in the developed world. A study comparing the healthcare systems of 11 countries between 2011 and 2013 found that the NHS scored highest on quality, access and efficiency. The UK’s overall top ranking was also achieved on the second lowest spending per capita across the 11 countries, at $3,405, only more than New Zealand ($3,182)[1].

By 2016 the picture for efficiency starts to change quite markedly, due a reduction in funding. The reduction in funding was the highest since 1951[2].

The NHS has found itself having to cover more services:

  • An increased need for services – for example, as a result of increased incidence of obesity and diabetes
  • A 4% increase in the costs of new medical treatments
  • A £4.6 billion reduction in local authority social care budgets since 2011 (a net budget cut of 31%), which has knock-on effects for the NHS – such as increased use of A&E and hospital services [3]
  • The annual transfer of NHS funds to the Better Care Fund (£3.8 billion from 2015). This Fund was set up to support the integration of health and social care, largely by cutting hospital care for those who are chronically ill and the frail elderly and replacing it with supposedly cheaper care in the community
  • The claw back of money from the Department of Health by the Treasury (for example, nearly £3 billion for the two-year period 2010-12) [4]
  • The annually recurring costs of running the NHS as a market (at least £4.5 billion p.a.) following the Health and Social Care Act of 2012 introduced by the Tory LibDem coalition [5]
  • The huge cost of Private Finance Initiative repayments on debt owed by NHS trusts and Foundation trusts following the end of government lending for capital projects such as new hospital buildings. It’s been estimated that the NHS is spending more than £3,700 every minute to pay for privately financed hospitals [6]l
  • A cut of £200 million in Local Authority public health budgets which fund many services such as school nursing, screening programmes, and smoking cessation programmes – despite recognition by the boss of NHS England of the need for “a radical upgrade in prevention and public health”. It is feared that this cut will not only affect preventative and public health services but will also have a serious knock on effect on NHS healthcare services. [7]
  • A cut in the money paid by the government to NHS providers for their work under the Payment by Results system from 2010/11. Over three-quarters of each hospital’s funding has come from this system through which hospitals are paid per treatment, according to prices set by a tariff. In recent years, payments have been cut by over 40% for a quarter of the treatments that hospitals provide [8]. So, for example, a hospital providing routine knee surgery would have been paid £3,077 for each procedure in 2009/10, but by 2013/14, the hospital would have received £1,673 for the same procedure.

By the end of the Tory / Libdem coalition, hospitals had seen their budgets drastically cut at a time when budgets needed increasing to meet greater demand. In effect the Lib Dems by enabling the Tories had facilitated the destruction of the NHS.

From 2016 onwards budgets fell sharply, down to just a 0.9 per cent increase in 2017. It would then go negative by 2018-19 with a 0.6 per cent fall in real spending per head in that financial year.

Growth would remain very low in 2019-20 at 0.2 per cent and 0.9 per cent in the years following. The wider health budget outside the NHS received even more sustained cuts, with two years of shrinking resource per head and a maximum growth rate of 0.4 per cent after 2017. This includes staff training and public health.

  1. UK NHS named best healthcare system by the Commonwealth Fund, NHS Foundation, 1 July 2014:
  2. Underfunded, underdoctored, overstretched: The NHS in 2016, The Royal College of Physicians (RCP), 21 September 2016:
  3. Vunerable adult social care risk: England-councils-face-1bn-shortfall, Guardian, 13 July 2016:
  4. Exclusive: Nearly £3bn returned to Treasury:
  5. At what cost? Paying the price for the marketin the English NHS
  6. The PFI hospitals costing NHS £2bn every year, The Telegraph, 18 July 2015:
  7. Osborne announces £200m cut to public health budgets, HSJ, 4 June 2015:
  8. Death by a thousand tariff cuts, OpenDemocracy, 28 April 2015:

NHS Deficit

In 2010/11, just 5 per cent of these providers overspent their annual budgets. By 2015/16, two-thirds of trusts (66 per cent) were in deficit as the slowdown in NHS funding took its toll.

The 2015 Spending Review provided additional funding for the NHS in the form of a £1.8 billion annual ‘Sustainability and Transformation Fund’. This funding contributed to a fall in deficits, but 44 per cent of trusts still overspent their budgets in 2017/18, with acute hospitals accounting for just under 90 per cent of all providers in deficit. The NHS provider sector as a whole ended 2017/18 with a deficit of £960 million.

The national planning guidance for the NHS states that £2.45 billion of funding support will be available to NHS trusts in 2018/19 through a ‘Provider Sustainability Fund’ which will replace the Sustainability and Transformation Fund. This guidance also states an ambition that the NHS provider sector will financially balance in 2018/19.

However, at the halfway point in 2018/19 NHS trusts are forecasting to end the year £558 million in deficit[1].

Sally Gainsbury, a senior policy analyst at the Nuffield Trust, a thinktank, said: “NHS providers started the financial year 2017/18 with a £4bn black hole between their underlying costs and income that was deepened further over the year.

“So while hospitals and other NHS services did make efficiency savings over the year, the vast bulk of those savings were needed just to stop the black hole getting any deeper. Essentially, services are having to run to just stand still, or even move slightly backwards.

“The real underlying deficit is likely to remain very similar to where it was at the start of the year – at around £4bn, which is inevitable as long as we continue to systematically pay hospitals and other services less than the cost of actually delivering care.”

In March, the public accounts select committee said NHS finances “remain in a perilous state”.

“The NHS is still very much in survival mode, with budgets unable to keep pace with demand. The NHS has a long way to go before it is financially sustainable,” the committee said [2].

Spending on Social Care and the impact on the NHS


Nurse Numbers

As of 2018 the NHS has 40,000 vacant nursing posts[1]. Despite the ending of bursaries it has not reduced the number of nurses entering the profession. Applications to train to be a nurse have always been over-subscribed, so the ending of Bursaries (putting aside the moral issue of making nurses pay to enter the profession) has meant that they have a smaller pot of applicants to choose from and it is more difficult to ramp up recruitment to meet present nurse shortages[2].

The key reason for the shortage is the number of nurses leaving the profession due to low pay and poor working conditions. Between July 2017 and July 2018, 1,584 more EU nurses and health visitors left their role in the NHS than joined. This could be due to Brexit or simply that these nurses can find better and work conditions in other EU countries. As can be seen in Figure 1, the drop in EU nurses has been offset to a small extent by an increase in non-EU nurses[3]. Projections for nurse shortages predict that following present trends there will be a 100,000 shortfall by 2030 (extrapolated figure based on an expected 1.5 times increase in shortages across the whole healthcare sector). There is a large cohort fast approaching pensionable age. A third are aged between 45 and 54 and one in seven (13.6%) are between 55 and 64. In midwifery the position is even starker, with a third of midwives already over 50 and eligible to consider retirement at 55[4]. The population is expected to increase by a further 11% to 62 million by 2041 putting further strain on the NHS and nursing[5].

Comparisons with other countries must be treated with caution due to differences in, for example, geographies, service design, and data. As shown in Figure 2, it appears the UK as a whole have relatively few staff in key groups compared to other developed countries. For instance, per head of population, the UK has fewer than half as many nurses as Norway (8 nurses compared to 18)[6].

One of the ways that nurse shortages have been mitigated has been to use agency staff. According to HEE, around 33,000 positions are filled temporarily by agency staff a large extra expense for local NHS trusts[7]. As at the end of 2018, NHS trusts were forecasting spending some £5.6 billion on temporary staff in 2018/19, compared to a planned spend of £5 billion. Using temporary staff can also be disruptive to health services and reduce the ability to deliver continuity of care to patients[8].

  1. What is the overall shortfall in staff in the NHS?, Nuffield Trust, Authors - Lucina Rolewicz & Billy Palmer, 08 May 2019:
  2. The numbers that explain the nursing crisis in the UK, iNews, Rachel Connolly 9 May 2018:
  3. How did we get to this situation? Nuffield Trust, 08-May-2019:
  4. What is the outlook for the future' Nuffield Trust, 8 May 2019:
  5. Office of National Statistics - Population Projections:
  6. How do we compare to other countries? Nuffield Trust 8 May 2019:
  8. What are the implications of these shortfalls, Nuffield Trust, 8 May 2019:

Nurse Pay

When nurses qualify they start on Band 5 of the NHS pay scale. From April 2010, newly qualified nurses in England were paid a starting salary of about £21,200. From 2018, new nurses should start on £23,000. Taking into account inflation, new starter nurses are now earning around £1,900 less than they might have in 2010. That’s an 8% reduction in pay over eight years[1].

Nurses saw their wage rises capped at either 0% or 1% between 2010 and 2018. In real terms this represented a 10% fall in wages. In 2018 nurses received a 1.5% payrise as part of a new pay deal. A nurse entering the profession in 2010 would more than likely be at the top of their particular pay-scale by 2019 so will receive a payrise that should match inflation with the new pay formula. However nurses lower on the pay scale will see a slightly above inflation pay-rise. On average nurses are £2500-£3000 worse off per year since 2010. The Health Foundation forecast in 2017 that this would lead to a 42,000 nurse shortage by 2020. Presently the nurse shortfall is 40,000 (2019) up from a figure of 25,000 in 2017. [2][3]. The wage restraint has been a false economy as NHS trusts have needed to go out to agencies to make up the shortfall, with the additional costs that entails (see section Nurse Numbers).

The cut in salaries for nurses is against a backdrop of a large increase in house rental prices and house purchase prices since 2010. The situation is particularly difficult in London, where they have seen the highest rise in rent rates. But across the UK rental and house prices have risen much faster than inflation.

The Royal College of Nursing (RCN) has reported “growing numbers of nursing staff using food banks, taking on additional jobs and accruing personal debt”. According to the RCN Foundation it awarded over 500 financial hardship grants to working, retired, trainee, or unemployed nurses, midwives and healthcare assistants in the UK in 2016. The Foundation says that one in four grants went to a full-time nurse. They largely cover cost of living expenses. The RCN also awarded 6,500 hardship grants to trainee nurses over three years (2015-17)[4][5][6].

  1. Pay rises: how much do nurses, the police, teachers and MPs get paid? Fullfact, 7 September 2018:
  2. Nurses will see their pay ‘cut by 12% over a decade’ Guardian, 29 April 2017:
  3. Pay rises: how much do nurses, the police, teachers and MPs get paid? Fullfact, 15 August 2018:
  4. How many nurses are using foodbanks? Fullfact, 12 May 2017:
  5. Nurses like me are using food banks and taking out loans – no wonder we agreed to strike over our pay, 15 May 2017: Independent,
  6. Show me the money; if nurses use food banks the reasons are anything but complex Nursing Times, 5 May 2017:

Nurse Welfare

Latest data from the Office of National Statistics (ONS)[1] shows more than 300 nurses in England and Wales took their own lives between 2011 and 2017. Previous research from the ONS showed the suicide rate among nurses was 23% higher than the national average, with female nurses at particularly high risk[2]. “It is never inevitable and we must all redouble our efforts to support nursing staff,” Dame Donna said. She highlighted how nurses were under increasing pressure in their workplace but claimed they were “repeatedly” ignored by their employers when they raised concerns about their mental health. “Nurses have long been considered a key high-risk group for suicide, due to the strain and level of responsibility of their role,” she said.

  1. Suicide deaths among nurses aged 20 to 64 years, deaths registered in England and Wales between 2011 and 2017, 24 October 2018: Office of National Statistics,
  2. Figures spark call for inquiry into 'alarming' levels of nurse suicide, Nursing Times, 29 April 2019


Two years on from the removal of the NHS student bursary (as of 2018), applications to nursing degree courses have plummeted by a third in England.

Numbers applying to begin training in September 2018 have dropped 12% compared to the same time last year, resulting in a total decline of 16,580 since March 2016, the last year students received financial support through the bursary. The fall in mature student numbers has been even more extreme, with a 16% drop by the June application deadline compared to the same point last year, and a total decline of 40% since June 2016.

The independent NHS Pay Review Body (PRB) warned this workforce gap could persist until 2027 unless immediate action is taken, jeopardising patient care for much of the next decade. In its official report to the Government last month, the PRB told ministers the removal of the nursing bursary had resulted in a marked drop in applications.

Nurses are qualifying with debts of £40,000 into a profession that is not particularly well paid. When student fees were introduced the logic applied was that students would earn higher wages and so should pay for the opportunity of university. Nurse wages mean that carrying a high debt is particularly difficult to pay off.

Click to sign the petition

Sign the petition to re-instate nursing bursary and scrap tuition fees

Currently 41,722 nursing vacancies in the NHS. Due to the removal of bursaries, the cost of tuition fees and the amount of student loan debt and current interest rate on student loans , applications to study nursing has fallen by over 20%.

Click here or on the image to sign the petition[2]

"Closing the gap" Key areas for action on the health and care workforce [3], National Health Excutive - workforce and training [4], Nursing Times - Rise in nurse vacancy rate in England prompts fresh warnings. [5]

Privatisation of the NHS

Purchasing not Selling

Privatisation facts and figures

If the NHS says no

NHS England political compliance

Tweeza lie 1 -

Tweeza lie 2 - I could give a detailed answer to the right hon. Gentleman’s question, but a simple and straightforward reply is what is required: the NHS is not for sale and it never will be.

Mental Healthcare

Funding for Mental Healthcare

Impact of reduced funding

Asset Sales



Medicines and the NHS




Care Homes

Financial Speculators

Local Authority Funding Squeeze

Costs to family members

To follow up

NHS ranked one of the best for protecting the poor >>>

Health and Hunt article

NHS and Taxes for

Mental Health beds >>

Labour Manifesto Healthcare