Oxygen Finance

Owen Smith needs to dig down into the detail of NHS spending

Owen Smith will apparently claim (as reported by the BBC) in a speech today that NHS spending with the private sector has doubled to £8.7B since the Tories came to office 6 years ago.

Oxygen Insights adds up and categorises details of the invoices paid by the NHS (NHS Trusts and CCG’s disclose details of invoices paid with a value of £25,000 and over). Our analysis shows that expenditure on bought in Health & Care services has increased by 30% over the past 3 years, as shown in this chart:

NHS Spend

The reason that 2012/13 (the blue line) looks much lower is because the CCG’s didn’t exist/disclose data that year, hence the data cannot be sensibly compared with the three years above it.

The more important question however, is “What was the NHS buying in?”. This next chart gives us the answer:

NHS Categories

If you look at what the NHS was actually buying in from the private sector, how much of it could sensibly be bought from the public sector? Does Owen Smith think the public sector should set up in-house pharmacy services? Is he criticising the fact that the NHS is buying in Pathology Services and Prosthetic Devices?

Surely the area of political contention actually relates to a very small part of the expenditure – the line at the top that says “Acute and Clinical Services”. This is the amount that the NHS paid the private sector for what we all think of as Hospital Services. This single category of spend has increased by 50% over the past 3 years – but this has happened from a very low base (£990M in 2013/14 to £1.51B in 2015/16).

Acute Services

In summary, Owen’s headline figure that isn’t quite what it initially seems. The real numbers that the politicians should perhaps be arguing about are these:

  • NHS Spending on bought in Acute/Clinical Services with the private sector in 2015/16 – £1.5B (this is essentially what the CCG’s spent with companies like Spire, Nuffield, and Circle)
  • NHS Spending on bought in Acute/Clinical Services with the public sector in 2015/16 – £33.7B (this is essentially what the CCG’ spend on buying in services from the NHS Acute Trusts)

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