Media Release

New report calls for introduction of long-term NHS spending target

A new report released by the Social Market Foundation (SMF) calls on the Government to introduce a long-term spending target for the NHS in England in order to set healthcare funding on a more sustainable trajectory and to reduce the annual calls demanding a one-off surge in expenditure.

Targeting Better Health, which was written by the SMF with funding from AstraZeneca, estimates that a new funding target – similar to those already in place for defence and international development spending – would increase NHS funding by £7 billion by 2020/21. This comes in the context of historically-low funding settlements this decade. The report identifies potential benefits of a target, including:

  • Ensuring that future spending levels better reflect the underlying cost changes in healthcare, such as a growing population, an ageing demographic and rising expectations for new treatments.
  • Instilling public confidence that the NHS is resourced properly – in the context where nine in ten report that there is a funding problem in the NHS;
  • Providing greater long-term certainty for commissioners and for investors in the UK’s health economy and life sciences industry, which currently has a turnover of £60bn and which accounts for a fifth of all R&D spending in the UK.

The report assesses a number of ways that a new health funding target could work and draws on lessons from other spending targets. It recommends that the government introduce a target containing dual objectives to increase spending and improve care outcomes. The SMF argues that under such a target the government could:

  1. Establish a long-term ‘NHS Funding Rule’ to increase healthcare spending levels by a minimum of the rate of GDP growth each year. The SMF estimates that this would increase healthcare spending by an additional £7 billion by 2020/21. This would be a rolling commitment and would apply to spending across both health and social care.
  1. Establish a small number of priority care outcomes to target every five years, such as improved cancer survival rates (where the UK performs comparatively poorly) and better outcomes in social care. Outcomes in these areas would be reviewed regularly, and if requisite levels of improvement were not observable after three years, the government would commit to investing additional funding to pursue these objectives more aggressively.

Targeting Better Health also sets out measures to hold the government-of-the-day to account and to ensure that there is transparency and accountability around the target. To ensure this the SMF argue that the Office for Budget Responsibility (OBR) should monitor healthcare spending to ensure the funding rule is kept, and a new Office for Patient Outcomes (OPO) should be created to collect data on care outcomes and to ensure that the care commitments are being met.

Report author and SMF research director Nigel Keohane commented:

“The NHS and social care system is showing signs of severe strain off the back of historically-tight funding settlements. But, looking for the next short-term cash injection to see us through the winter is no-longer the answer. It’s time to re-set our policy and establish a spending target for healthcare.

“A healthcare spending target could provide long-term certainty, reassure the public, and ensure that the necessary funding is available to meet rising costs driven by an older population and new treatments.”


Commenting on the research Lisa Anson, Country President, AstraZeneca UK and Ireland, said: 

“As a company that is committed to working in partnership with the Government and NHS to benefit patients, and a company that has invested £2 billion in R&D associated with our UK operations in 2015, AstraZeneca is pleased to support this important and timely contribution to the debate around future health funding.  Sustainable, predictable long-term investment in the NHS is essential for driving improved patient outcomes, particularly in key areas where the UK is lagging, and for providing the necessary headroom for investment in innovative technologies ensuring a world class health system and a thriving life sciences sector.”


Notes to editors:

  • A copy of Targeting Better Health is attached to this release.
  • Targeting Better Health will be available online from 00.01 Thursday 8 December 2016 via the SMF website at this link:
  • AstraZeneca has funded development of the report, whose purpose was to assess the potential benefits and design of a health funding target. The Social Market Foundation retains full editorial control.
  • The report author is available for interview and comment. For more information, please contact the SMF Communications Manager Sean O’Brien on
  • For further comment from AstraZeneca, please contact Elisa Agate, External Communications Lead, AstraZeneca on


About the Social Market Foundation:

The Social Market Foundation (SMF) is an independent, non-partisan think tank which develops innovative ideas across a broad range of economic and social policy. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. For more details about the SMF’s work, go to


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