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About this release
This release by Public Health Scotland provides an annual update on how health service operating costs were spent in 2019/20. It covers hospital, community and primary care provided to patients, through territorial NHS Boards, the State Hospital and the Golden Jubilee National Hospital. Information on expenditure in the Scottish Ambulance Service and in National Services Scotland is also provided.
- £13.2 billion was spent on health service operating costs. This represents a 6.6% (£811m) increase on the £12.4bn spent in 2018/19. Once adjusting for inflation (real terms), total operating costs, increased by 4.5% compared to 2018/19. The corresponding increase between 2017/18 and 2018/19 was 0.6%.
- The £811m increase in expenditure was not shared evenly across the different sectors. Of the total increase, £499m (62%) was spent on hospital services, £203m (25%) on community services and £99m (12%) on family health services.
- As part of the 3-year Agenda for Change (AfC) pay settlement; in 2019/20 staff costs increased as a consequence of a 3% pay increase for the majority of staff and compression of AfC pay bands, resulting in a larger jump between progression points. In addition, there has been an increase in employer’s superannuation contributions for all staff in the NHS pension scheme. This impacts the Hospital and Community Sectors, where there are high numbers of staff on AfC contracts.
- Expenditure on hospital services was £7.3bn, a cash terms increase of 7.3% and a real terms increase of 5.3%, when compared to the previous year.
- Expenditure on community services was £2.6bn, a cash terms increase of 8.3% and a real terms increase of 6.3%, when compared to the previous year.
- Family health services expenditure, which includes the cost of running local GP practices in addition to the local pharmacy, dental and ophthalmic services, amounted to £2.8bn, which represented a cash terms increase of 3.7% and a real terms increase of 1.7% compared to the previous year. This smaller comparative increase in expenditure, was in part due to the sector having a higher number of contractors, with different remuneration arrangements to the AfC staff.
The information is primarily derived from Scottish Financial Returns (SFRs) (external website) compiled by NHS Boards. Some figures for the current year may not be directly comparable to those for previous years; while every attempt is made to make comparisons of the data possible, changes in accounting methodology must be considered, along with other factors such as organisational change or missing data. See Summary of Changes (external website) for more information. Historic costs have been expressed both in 'cash terms' and in 'real terms' (adjusting for inflation). To obtain 'real-terms' figures, the costs have been divided by an adjustment factor (the 'GDP deflator (external website)') determined by HM Treasury. Rather than expressing simply the amount of money which was spent in any previous year, real terms costs therefore show approximately what the services provided in that year would have cost in 2019/20.
The next release of this publication will be 16 November 2021.
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