How is the NHS budget divided up?
Proportion of government healthcare expenditure (2015)
2 months

How does the government apportion the NHS / healthcare budget in the UK?

The chart above shows the breakdown of NHS spending in the UK (2015).

Most healthcare spending is devoted to curative and rehabilitation care (around 63%). Almost half of total spending is in hospitals, and 15% in the family health services sector, which includes spending on GPs, dentists, opticians and pharmacists.

Long-term care spending accounts for 15%, but this does not include significant spending by individuals on social care. Spending on medical goods, which includes medicines bought at a pharmacy on prescription, accounts for about 10% of the total.

Preventative healthcare makes up 5% of the total budget, although this is forecast to grow in the future, as the benefits of preventative healthcare ('dollar for dollar') become more apparent an healthcare orients itself towards a more preventative model.

Rising cost of drugs

Estimated total NHS spending on medicines in England has grown from £13 billion in 2010/11 to £17.4 billion in 2016/17 – an average growth of around 5 per cent a year. These figures are uncertain due to gaps in data, but the rate of increase is substantially faster than for the total NHS budget over the same period.

Just under half the amount spent on drugs is in hospitals, and just over half is spent on drugs prescribed in primary care. A smaller amount was prescribed in hospitals but dispensed at a high street pharmacy.

The actual amount paid for medicines by the NHS will differ from these so-called “list costs” because they exclude discounts the NHS may receive, dispensing costs, as well as income from prescription charges. There has been concerns that this trend is likely to accelerate post Brexit, with US/UK trade deals being a particular concerns for the rising cost of drugs. Under current Government plans the NHS will be projected to pay £500 million a week to US corporates for drugs by the end of 2021.

Long term care

The ageing population of the UK is also prediction to cause sharp increases in the cost of long term care over the next decade, particularly the the following areas:

  • Breathing
  • Nutrition (food and drink)
  • Continence
  • Mobility
  • Communication
  • Psychological and emotional needs
  • Cognition (understanding)


New approaches to drug provision, commissioning, and delivery are going to be needed over the coming decade in order to halt the cost of drugs spiralling out of control. Efficiencies may be made in preventative medicine -  although the challenge remains in encouraging the adoption of long term lifestyle changes in the wider population. Lastly the ageing population and the impact this will have on long term care will continue to be a significant pressure on NHS resources. 


ONS data

We create insights from the data released by NHS England, and related agencies.

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