In a recent post, I discussed the annual budget of NHS England. In this article, I will provide figures for the UK devolved nations.
Devolution?
The UK Civil Service defines devolution as being how parliaments and governments make decisions. In the UK it means that there are separate legislatures and executives in Northern Ireland, Wales and Scotland.
The legislature (Northern Ireland Assembly, National Assembly of Wales and Scottish Parliament) and executive (Northern Ireland Executive, Welsh Government and Scottish Government respectively) bodies have many powers to make laws and deliver public services within the nation they represent.
Note, however, that some powers are termed reserved as opposed to devolved, and are retained by the UK Government.
Civil Service factsheet: https://assets.publishing.service.gov.uk/media/5c38cc6ce5274a70ca3c3cef/DevolutionFactsheet.pdf
The following table shows how the spending responsibility for different policy areas, including health, is shared between UK Government and each nation’s government:
As the table shows, setting a budget and 100% of spending decisions for Health and Social Care in Northern Ireland, Wales and Scotland are the responsibility of each devolved administration.
The next question is how much does each nation spend on its local NHS? To put this in context, one must first understand what is each nation’s total budget.
The Barnett formula
The Barnett formula is used by the UK Treasury to calculate the annual change in the block grants given to devolved administrations in Northern Ireland, Wales and Scotland. The formula is based on changes to the budgets of UK government departments, and is used during spending reviews.
The Barnett formula aims to ensure that each country receives the same change in funding per person for devolved services. For example, if health spending increases by £1000 per person in England, the devolved governments should receive the same amount.
The Barnett formula is controversial and there is no consensus on how to change it. Some argue it does not account for different needs or costs in different areas, and that it does not offer nations any incentive to become more productive. On the other hand, the formula is seen as simple, objective, and politically expedient.
A longer discussion on the formula is provided by the Institute for Government website: https://www.instituteforgovernment.org.uk/article/explainer/barnett-formula
Similarly, the UK Parliament Lords Library also describes the formula in depth: https://lordslibrary.parliament.uk/the-barnett-formula-how-it-operates-and-proposals-for-change/
Devolved Administration Budgets
Northern Ireland
The Northern Ireland Department of Finance published a 2024-25 Budget document in which they indicate that the total funding available for all devolved departments is £17.3 bn.
The Department of Health is responsible for promoting an integrated system of health and social care. Its budget is £8.2 bn, with more than half of expenditure listed as “Hospital Services”. In addition to this, a smaller amount of budget is allocated by the Northern Ireland government to improve specific healthcare indicators, such as reduction of waiting lists.
Wales
The Welsh Government has a budget of £23 bn for the financial year 2024-25.
Approximately half of this budget (£11.4 bn) is spent on health and social services, and the majority of this amount is directly used to fund the Welsh NHS.
Reference: https://www.gov.wales/sites/default/files/publications/2023-12/draft-budget-2024-2025-leaflet.pdf
Scotland
The Scottish Budget document for the financial year 2024-25 discusses challenges in meeting its obligations due to the allocation received by the UK Government, which is is lower than in previous years in real terms. The Scottish Government also lists ways in which local fiscal policies aim to increase its annual budget. The total budget for the financial year is shown to be £44.3 bn.
The amount the Scottish Government will set aside during this financial period for NHS Recovery, Health and Social Care is £19.6 bn.
Reference: https://www.gov.scot/publications/scottish-budget-2024-25/
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