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“The NHS of the United Kingdom was established in 1948 with the underlying principles that the NHS should be funded predominantly through general taxation, that care should be comprehensive and that access be based on clinical need and not ability to pay. The NHS had been preceded by the 1911 National Insurance Act, which provided health insurance for industrial workers, allowing them access to a developing family doctor service (AbelSmith, 1988). The Second World War had also seen some nationalisation of health services, as hospitals were registered and centrally run from 1938 (Abel-Smith, 1964; Greengross, Grant & Collini, 1999). In Scotland, the Highlands and Islands Medical Service had been providing a state-funded and administered service to an area equivalent to half the land mass of Scotland since 1913 (Wellings et al., 2020). In Wales, schemes such as the Tredegar Workmen’s Medical Aid Society, which provided health care on the basis of weekly contribution, had grown in coverage from the start of the 1900s up to the foundation of the NHS (Thompson, 2018). The NHS built on these existing schemes to provide a national system that was locally delivered.

“From 1948, the NHS served England, Scotland and Wales in a similar manner, while the Northern Ireland’s health system operated semiautonomously. There were differences in the NHS across the constituent countries, including in legislation and parliamentary accountability, but from a patient’s perspective, minimal differences were evident until devolution in 1999 (Greer, 2016). Cylus et al. (2015) provide an account of important changes occurring through the 1970s to 1990s. Before devolution, the then Conservative Government passed the 1990 National Health Service and Community Care Act, which introduced the “internal market”, separating the purchasing and provision of care. GP fundholding was also introduced, which allowed larger GP practices to hold their own NHS budgets to cover a range of costs including staff, prescribing and a limited range of hospital services; in essence, becoming the purchasers of services for their patients. Hospitals and community and mental health services were organised into semi-independent NHS trusts.”

“Since 2008, the focus shifted onto achieving efficiency savings in the health system by increasing productivity. A funding gap has emerged between meeting the increasing health needs of the population and the limited resources that have been made available to achieve this. Some of the increasing demand is the result of natural demographic changes, such as the large cohort of ‘baby boomers’ ageing, but technological and medical advances and increased patient expectations have also played a role. Reduced access to long-term care has also added pressure on hospital services. Demographic changes are projected to increase spending on long-term care from 1.5 % of GDP in 2020 to 2.7 % in 2070, while public spending on health care would increase from 8.1 % GDP in 2020 to 9.4 % in 2070, which contributes to the identification of fiscal sustainability risks in the medium and in the long-term (European Commission, 2019b).

“In 2017, analysis of projected demand and historical funding growth rates suggested that at least GBP 4 billion more for the NHS was needed in 2018/19 to stop patient care deteriorating. Spending was projected to fall by 0.3 % in 2018/19 without considerable investment. The government announced an increase in NHS spending (March 2018) and published the Long Term Plan for the NHS in England (January 2019). It sets out how an increase of GBP 33.9 billion by 2023 (a 3.4 % annual increase in real terms) should be spent. Most of the new spending is for clinical care, while new spending on capital, public health and staff training are not included. This injection of funds allowed hospitals to reduce or overcome their deficits, but access to the new funds was conditional on providers making further efficiency gains, and it is not clear how this can be achieved. Providers are still overspending because of increased demand – particularly in urgent and emergency care.”

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“A key driver of the overspending against budgets is the increase in temporary staffing. Temporary staff are used to manage workload in the face of increased unplanned demands, high levels of vacancies, sickness/absence and staff turnover. Workforce shortages are due to the insufficient supply of domestic health workers as well as doctors and nurses leaving the workforce early. Migration policies which hamper international recruitment are also cause for concern. A drop in international recruitment has the potential to cause great pressure in social care due to substantial staffing shortages (Health Foundation, King’s Fund & Nuffield Trust, 2018).”

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World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.

Page last updated July 30, 2023 by Doug McVay, Editor.