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Health will account for almost a third of spending

11th August 2011

A report from the Institute of Fiscal Studies says that health will account for almost a third of all UK government spending by 2015.

Pound Sign

A combination of government cuts and a long-term shift in priorities are the key reasons at a time that the NHS is facing growing financial pressure as the demand for care and the costs of providing it continue to rise.

The think tank looked at trends in government spending from the late 1970s through to the present day to reach its conclusions.

IFS director Paul Johnson said “The way the state spends our money has shifted to a remarkable extent towards spending on health and social security over the past 30 years.”

While spending on housing and defence has fallen, the NHS saw record spending growth in the 1990s as the UK attempted to close the gap with other European countries which spend more on health.

IFS has also highlighted challenges ahead with an ageing population in the UK with the demands of healthcare, pensions and social care on public finances likely to continue to grow.

While the analysis is based on UK-wide figures and forecasts from the Treasury and new Office for Budget Responsibility, there is likely to be variation in health spending.

In England, the health service has been promised a real term increase ever year and while the Scottish government has promised to protect health spending. But in Northern Ireland and Wales, the health service faces real terms reductions in the coming years.

 

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