NCPA - National Center for Policy Analysis

U.K. To Spend More On National Health

January 28, 2000

British Prime Minister Tony Blair has pledged to increasing spending on the National Health Service (NHS) over the next five years in order for the United Kingdom to reach the European average for health spending as a percent of gross domestic product (GDP).

However, health economists say the government will have difficulty meeting that pledge without raising taxes. While the U.K. treasury is enjoying a surplus now, the situation could be quite different in five years, they say.

John Appleby, director of the health systems program at the King's Fund, an independent health care charity, says the government also has a much higher mountain to climb than most commentators believe.

  • Appleby says that the 1997 figures from the Organization for Economic Cooperation and Development show that U.K. spending on health care of £53 billion is 6.8 percent of GDP, which it estimated at £784 billion, whereas the Office for National Statistics said GDP was £804 billion and the Treasury said it was £814 billion.
  • If the Treasury's figure is accurate, then the U.K. only spent 6.5 percent of its gross domestic product on health care.
  • Appleby also believes that the true average for the European Union is 8.6 percent -- not the 8 percent widely quoted by the press; thus the government will have to find an extra 2 percent of GDP to equal the European average, not 1 percent as the government claims.

Spending would increase by a total of 28 percent over five years, which at current figures (taking public spending on the NHS as £49 billion) would mean an increase £13.7 billion.

Source: Annabel Ferriman, "Blair Will Have Difficulty In Matching European Spending," British Medical Journal, January 29, 2000.


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