Scottish health service costs
Summary for financial year 2024/25

About this release

This release by Public Health Scotland (PHS) provides an annual update on NHS Scotland operating costs for financial year 2024/25. It includes the costs associated with delivering patient services across all care settings by Scotland's 14 territorial NHS boards, the State Hospital and the National Waiting Times Centre at the Golden Jubilee University National Hospital.

In order to improve the quality and value of costing information in Scotland, NHS boards are currently transitioning to a Patient Level Information and Costing System (PLICS). However, during this transition period, PLICS has impacted both the data quality and comparability of 2024/25 data, particularly at more detailed levels of expenditure. Consequently, this release is limited to high-level summary statistics and, in agreement with the Office for Statistics Regulation, the accredited status of these statistics has been removed - they are now classified as Official statistics in development. Work is ongoing across NHS boards to complete the implementation of PLICS and ensure consistent cost allocation methods are adopted. Please see the Planned Developments section of the report for more information.

Main points

Trend in real terms and cash terms expenditure for the last eleven financial years for NHS Scotland. In cash terms, there have been year-on-year increases in total operating costs while the only reduction in total real terms expenditure was in 2022 to 2023 financial year when there was a decrease of 3.1%. Total real terms expenditure has increased from £14.5 billion in 2014 to 2015 to £18.2 billion in 2024 to 2025. The trend over the last eleven years shows that the Hospital sector has the highest level of expenditure each year while Resource Transfer has the lowest. In previous years the Family Health sector had the second highest level of expenditure but in 2020 to 2021 the Community sector became the second highest costing sector.

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Figure 1: Trend in expenditure, 2014/15 to 2024/25

1. Please note the different scale used on the secondary axis for expenditure per sector.
2. Resource Transfer is expenditure that is transferred from NHS boards to local authorities to support the provision of integrated health and social care.

In the financial year 2024/25:

• £18.2 billion was spent on health service operating costs, a 6.3% (£1.1 billion) increase on the £17.2 billion spent in 2023/24.
• After adjusting for inflation to allow meaningful comparisons over time, total operating costs increased by 2.6% in real terms over the last year and by 25.5% since 2014/15. During this period, the only year-on-year decrease in real terms (-3.1%) was in 2022/23, which followed a period of accelerated growth from 2019/20 to 2021/22, in part due to additional non-recurring funds made available to help mitigate the impact of the COVID-19 pandemic.
• £10.4 billion was spent on hospital-based services, representing a 6.9% increase in expenditure and a 3.1% increase in real terms. They accounted for 56.8% of total operating costs - the highest share since 2015/16 (56.9%). This share has increased from 53.8% in 2020/21, when the COVID-19 pandemic had its greatest impact on the delivery of hospital-based services, and has increased each year since then.
• £3.9 billion was spent on community-based services, representing a 5.9% increase in expenditure and a 2.1% increase in real terms. This is the first real terms increase since 2021/22. Community expenditure increased substantially during 2020/21 and 2021/22, partly due to the response to the pandemic, including the introduction of the Test & Protect and the vaccination programmes.
• The combined cost of staff working in the hospital and community sectors was £9.6 billion, an increase of £636 million (7.1%). Staff costs accounted for 52.6% of total operating costs. This proportion has risen from 47.6% in 2017/18, increasing every year due to increasing numbers of staff, and also larger annual pay awards in recent years in response to general inflation.
• Family Health Services (FHS) expenditure, which includes the costs associated with running local GP surgeries, providing dental and ophthalmic services and the provision of prescriptions and local pharmacy services, increased by 5.6% to £3.5 billion. In real terms, expenditure in this sector is estimated to have risen by 1.9% in the last year and by 4.8% since 2014/15.

Background

Total expenditure reported for NHS Scotland includes the 14 territorial NHS boards, the State Hospital and the National Waiting Times Centre at the Golden Jubilee University National Hospital. It excludes expenditure by other national NHS organisations, such as NHS24 and the Scottish Ambulance Service, although limited information on their expenditure is provided in separate tables. It also excludes any capital expenditure, such as that used to build new facilities.

Historic costs can be expressed in ‘real terms’ (adjusting for inflation). To obtain ‘real terms’ figures, the costs have been divided by an adjustment factor (the ‘GDP deflator’) determined by HM Treasury. Real terms costs therefore estimate approximately what the services provided in a previous year would have cost in financial year 2024/25, after making an adjustment for inflation.
For more information on the terms used in this summary, please see the report.

Further information

The next release date of this publication is to be confirmed.