The presentation of data on NHS expenditure is flawed, writes David Rowland, which prevents policymakers from having a clear understanding of where money within the system is going. He estimates that in 2018/19, the amount spent by NHS England on the independent sector was around 26% of total expenditure, not 7% as widely reported.
Claims regarding the extent of NHS ‘privatisation’ ought to be easily settled by referring to the official data contained within the Department of Health and Social Care’s (DHSC) annual report and accounts. These accounts, which set out how much is spent by the NHS in England in the independent sector have nonetheless been inconsistent and difficult to interpret. Following a comprehensive review of six years of these accounts our view is that the presentation of this data is seriously flawed and requires revision.
The 7% figure
The settled view in the media is that around 7% of NHS expenditure is spent by the NHS in the independent sector to purchase healthcare for patients. The source of the 7% figure is a table which has been included in the Department’s annual report and accounts each year since 2014-15, which details all expenditure on healthcare provided by ‘non-NHS bodies’. A combined version of all the entries contained within these tables is set out in Table 1 below.
In total, between 2013/14 and 2018/2019 an additional £5.6 billion of NHS England’s budget went on the independent sector – an increase of 23%. In the main, this overall increase in expenditure on the independent sector is due to the increase in the amount that local Clinical Commissioning Groups (£4.3bn) have purchased from the independent sector. Most other areas of expenditure on the independent sector – for example Primary Care Services – have not increased substantially. The reported increase in the voluntary sector spend is due to a change in how the DHSC accounts classified this type of expenditure rather than their being any significant actual increase in this area of spend.
It is important to have a reliable estimate of annual expenditure by the NHS in the independent sector so that policymakers can those businesses and organisations which provide publicly funded healthcare to account. Our earlier research estimated that there were around 53,000 individual contracts which underpin flow of money between the NHS and the independent sector. We now estimate that these 53,000 contracts are worth £29 billion each year.
A correct presentation of expenditure also allows the media and parliamentarians to have a clear understanding of where money within the NHS system is going and the trends that are taking place. If these facts are hidden within the accounts, it limits a broader understanding of the nature of healthcare provision in England. Healthcare in England is now very much less directly provided by the NHS than most people think.