Private provision of NHS services


A department of health spokesman told the BBC yesterday  : “Use of the private sector in the NHS represents only 6% of the total NHS budget – an increase of just 1% since May 2010.  Charities, social enterprises and other healthcare providers continue to play an important role for the NHS.”

This figure seems very close to that produced in Laing and Buisson’s NHS Financial Information 2013 which claims that £5.9 billion was ” total NHS spending on healthcare services supplied by the independent sector in England – covering private companies and voluntary organisations”.

But according to Pulse  the Department of Health annual accounts revealed that spend on buying healthcare services from non-NHS providers topped £10bn for the first time in 2013/14,

The Nuffield Trust produced a report on  Public Payment and Private Provision in 2013. They found that by 2011/12 private provision had increased to £8.7 billion out of £105.4  billion – 8.25% of the budget for the NHS in England. These figures appear only to include direct provision of secondary care.  NHS Trusts sometimes subcontract work to private providers, and that may not be included in this total.

Spending on non-NHS providers
Spending on non-NHS providers as a percentage of total PCT spending on secondary care, 2006/07 to 2011/12

However a separate Nuffield report, The Anatomy of Health Spending 2011/2  found that expenditure on Primary Care in England, which is almost entirely privately provided, was £21.6 billion in 2011/2. This was 24% of the PCTs’ expenditure and included GPs, dentists, opticians and pharmacy.  Despite what is often said, they found that the cost of prescribed drugs (£13.8 billion in 2013/4)  had barely risen as the average cost per item had fallen, though payments to pharmacists for services such as smoking cessation had increased.

The same report found that expenditure on PFI interest by NHS Trusts in that year was £628 million, which also spent £11.2 billion on supplies and services, largely from private providers.

There are of course terrible problems of definition in all these figures, and even more so in attempting comparisons over time.

But the total NHS spending in the private sector in 2011/2 appears to have been at least £42 billion, or about 40% of the budget.