UK Health Care Spending History from 1900

In 1900 the United Kingdom spent 0.3 percent of GDP on health care programs. In the 2010s, government spends over 7 percent of GDP on health care programs.

A Century of Health Care Spending

Health care spending increased rapidly during the second half of the 20th century.

Chart 2.41: Health Care Spending in 20th Century

Health care spending started out at the beginning of the 20th century at 0.3 percent of Gross Domestic Product (GDP). Until after World War I it never broke 0.5 percent of GDP. In the 1920s healthcare spending held at about 0.8 to 0.9 percent GDP. In the 1930s healthcare ramped up to 1.7 percent GDP by 1933 and then drifted upwards, peaking at 1.76 percent GDP in 1939 just before World War II. During World War II healthcare spending dropped below 1.2 percent GDP.

After the war, with the creation of the National Health Service in 1948, healthcare spending began a sustained increase, breaching 2 percent of GDP in 1947, 3 percent of GDP in 1951, 4 percent of GDP in 1970, and 5 percent of GDP in 1980. In the 1980s and 1990s healthcare expenditure fluctuated between 4.3 and 5.3 percent of GDP.

In the 2000s healthcare expenditures increased massively, from 5.1 percent GDP in 2000 to a peak of 7.65 percent GDP in 2010. Since 2010 healthcare expenditures have declined, down to 7.1 percent GDP by 2020. Healthcare spending has increased sharply in response to COVID, at over 10 percent GDP in 2021.

Public Healthcare Before the National Health Service

Government provided modest amounts of health care in the first half of the 20th Century.

Chart 2.42: Health Care Spending Before the NHS

Health care spending before World War I was almost exclusively delivered by local authorities. In 1900 the entire 0.3 percent GDP in health spending was from local authorities. The central government started to contribute in 1909, so that by 1914 the central government spent 0.15 percent GDP and local authorities 0.37 percent GDP.

After a dip in World War I, health care spending almost doubled in the early 1920s, with central government spending increasing to about 0.3 percent GDP and local authority spending doubling to 0.6 percent GDP. With the onset of the Depression, central government health spending increased to about 0.8 percent GDP and local authority spending increased to about 0.85 percent GDP.

Chart Key:
- Local authority spending
- Central government spending

Health care spending dropped sharply in World War II, with central government spending dropping to 0.55 percent GDP and local authority spending almost cut by 40 percent to 0.6 percent GDP.

At the end of the war, health care spending recovered with central government and local authorities spending about 0.7 percent GDP each on health care.

Government Healthcare in the Age of the National Health Service

After government pensions, The National Health Service is the biggest government program in the UK.

Chart 2.43: Health Care Spending under the NHS

Health care spending increased rapidly in the years immediately after World War II. It breached 2 percent GDP in 1948 and 3 percent GDP in 1951. After peaking at 3.37 percent GDP in 1951, spending moderated down to 3 percent GDP for most of the 1950s. But expenditures resumed growth in the 1960s, almost reaching 4 percent GDP in 1967. Spending stayed around 4 percent of GDP until 1973.

The mid to late 1970s saw increases in health care spending under a Labour government, reaching 5 percent GDP in 1980, peaking at 5.24 percent GDP in 1981.

In the 1980s the Conservative government cut health care spending down to 4.3 percent GDP in 1989-90. But spending increased in the early 1990s, reaching 5.5 percent GDP in 1995. By 2000, though, spending was back down to 5.1 percent GDP.

The 2000s saw an historic increase in health care spending under the Labour government, going from 5.08 percent GDP in 2000 to 7.65 percent GDP in 2010. In the 2010s health care spending has moderated, down to about 7.1 percent GDP by 2020. Healthcare spending has increased sharply in response to COVID, at over 10 percent GDP in 2021.