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The National Health Service (NHS) was created after World War II, so UK national debt must have been high (?) at that point. The creation of the NHS should have caused a great increase in national debt, did it?

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    Are you talking about the National Health Service in the UK? – Steve Bird Jul 15 '16 at 10:45
  • Yes, sorry, I'll update the question – tony Jul 15 '16 at 10:53
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    should have caused a great increase in national debt - why do you think that? – pjc50 Jul 15 '16 at 14:42
  • Because the government paid for the NHS? The money had to come from somewhere. – tony Jul 15 '16 at 15:15
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    The cost of the NHS is mostly in operating cost (staff, consumables) rather than capital cost. Especially in 1948. So it might affect the deficit, or have required a tax increase, but not appear as a one-off construction cost. – pjc50 Jul 15 '16 at 15:35
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In fact the creation of the NHS didn't have a significant influence on the national debt. This is mostly because the NHS wasn't created from scratch (with thanks to Steve Bird). There were already existing (& publicly funded) institutions and entities (with regards to welfare,healthcare,...). These were merged and augmented to form the first NHS. Therefor the impact (budget wise) was not as great as one would expect.

In fact Graphs show a peak in national debt during 1948 - 1949 following a steep (and later on steady) decrease in debt.

During the post-war years of '48 & '49 the national debt measured a stagering 230% of GDP. This debt was mostly generated during the 2 world wars.

But 10 years later it had dropped back to around 100 - 110%. This despite the foundation of welfare-structures like the NHS. The drop continued till 1975 - 1976 when the world was faced with an economic crisis (Oil - crisis). Yet the debt continued to drop (although very slowly) till around 1990 - 1992 when debt measured less than 30% of de GDP.

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More info can be found here (including some graphs): UK national debt: the economist

If you really want to look up the UK expenditure in debt then i advise the following website: Uk public spending

Example the public spending division in 1949:

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Should you wonder why the debt dropped so fast, then I would advise you to read up on the Marshall Plan Marshall Plan And other Post-War Economic initiatives.

  • That's great thanks, I'll read up on the Marshall Plan, hopefully that'll lead me to the other initiatives. – tony Jul 15 '16 at 12:38
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    It's probably worth adding that many of the institutions that became part of the new NHS already existed (and in many cases were already publically-funded) so the cost of creating the NHS wasn't as high as it could have been if it had been created from scratch. – Steve Bird Jul 15 '16 at 12:48
  • @SteveBird Thanks for the input. I'll try to add it as soon as possible. – User999999 Jul 15 '16 at 12:52
  • Arguably "because of" the creation of the welfare state, not "despite"! – pjc50 Jul 15 '16 at 14:43
  • I think it is important to explain that government spending may be financed by tax or deficits, only the latter raise the debt under some conditions (under some conditions, deficits do not even raise debt, e.g. high economic growth, low interest rates) – PatrickT Jul 15 '16 at 15:49
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The direct precursor to the NHS was the Emergency Hospital Service.

It is important to understand that the UK's preparations for war included requisitioning basically every piece of infrastructure and productive capability in the country. Part of this was preparing for mass civilian casualties from air raids and possible invasion; in the end this was not as bad as feared, but there were still tens of thousands of civilians requiring medical treatment as a result of enemy action. Not to mention service personnel and quasi-service personnel like the ARP and critical workers in munitions and transport.

The physical structure of the NHS's hospitals already existed, and the general practitioner system also already existed having been set up under Lloyd George. The cost of setting up the NHS was therefore about assuming the ongoing cost of staff, rather than a one-off construction cost.

The overall expenditure and tax increases in the 1939-49 period are probably quite hard to separate from the cost of the war.

  • The hospitals themselves were largely a mixture of charities ("voluntary hospitals", often in dire financial positions) and municipal hospitals (sometimes associated with former workhouses as the last vestige of the poor law system). Most had been poorly maintained and some were damaged in the war, so the were major maintenance costs just to keep them functioning. – Henry Jul 15 '16 at 15:58

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