Was a record amount spent on private providers by the Department of Health?

Published: 24th Jul 2019

In brief

Claim

The Department of Health and Social Care gave private firms a record £9.2 billion in 2018.

Conclusion

The department spent £9.2 billion on purchasing health care from private providers in 2018/19. That’s a record amount of spending in cash terms, but not in real terms or as a proportion of the department’s budget.

“The Department of Health and Social Care handed a record total of £9.2bn last year to private providers”

The Guardian, 21 July 2019

The Department of Health and Social Care spent roughly £9.2 billion, on purchasing healthcare from ‘independent sector providers’ in 2018/19. That’s 7.3% of all of the department’s budget for day-to-day operations that year.

That’s a record amount of spending in cash terms (if you don’t account for inflation over time), but not if you do account for inflation or look at it as a proportion of total Department of Health and Social Care spending.

Looked at in real terms, more was spent on purchasing services from private providers in both 2015/16 and 2016/17—around £9.4 billion in each year.

A larger proportion of the department’s budget was also spent on private providers in those two years—7.7% compared to 7.3% in 2018/19.

The amount of money spent by the NHS on services from private providers is a controversial topic and we’ve written before about the trends in spending on private providers across the NHS.

As we said back in 2017, research from the health think tank the King’s Fund found that the use of private providers varies across the NHS.

The Health Foundation and Institute for Fiscal Studies (IFS) say “While the NHS has always purchased some services from the private sector, the role of the private sector in providing routine community, diagnostics and elective (non-emergency) care was formalised and expanded in the 2000s, and now accounts for a significant share of public spending on health in England.”


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