About this release

This release by Public Health Scotland (PHS) provides an annual update on how health service operating costs were spent in financial year 2020/21. It covers hospital, community and primary care provided to patients, through territorial NHS boards, the State Hospital and the National Waiting Times Centre. Please note this release covers the first full financial year after the COVID-19 pandemic began in Scotland and so patterns of expenditure are impacted by the measures NHSScotland took to respond. It has also impacted on the level of detail around expenditure that NHS boards were able to provide to PHS (see main report for more detail).

Main points

Image caption Figure 1: Trends in real terms operating costs by sector, 2011/12 to 2020/21

In financial year 2020/21:

  • £14.7 billion was spent on health service operating costs. This represents a 11.8% (£1.6 billion) increase on the £13.2 billion spent in 2019/20. Once adjusting for inflation (in real terms), total operating costs increased by 5.2% compared to 2019/20.
  • Expenditure on hospital services was £7.9 billion (53.8% of all total expenditure), a cash terms increase of £615 million (8.4%) and a real terms increase of 2.0%, when compared to the previous year. Of that expenditure £5.5 billion (68.9%) was used to cover staff costs.
  • Expenditure on community services was £3.5 billion (23.7% of total expenditure), a cash terms increase of £843 million (31.9%) and a real terms increase of 24.1%, when compared to the previous year. This larger than normal increase is mainly due to the introduction of new pandemic-related services such as Test & Protect and the Vaccine rollout programme, although the exact cost of these services was not able to be quantified in these statistics.
  • Family health services (FHS) expenditure includes the costs associated with running local GP surgeries, providing dental and ophthalmic services and the provision of prescription and local pharmacy services. FHS expenditure amounted to £2.9 billion (19.5% of total expenditure), which represents a cash terms increase of £67 million (2.4%) and a real terms decrease of 3.7% compared to the previous year.


The information is derived from data collection templates and Scottish Financial Returns (SFRs) compiled by NHS boards. 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, real terms costs therefore show approximately what the services provided in that year would have cost in financial year 2020/21, after making an adjustment for inflation.

Further information

The most recent detailed data files available relate to the 2019 to 2020 publication.

The next release of this publication will be 21 February 2023.

General enquiries

If you have an enquiry relating to this publication, please email phs.costsinfo@phs.scot.

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Older versions of this publication

Versions of this publication released before 16 March 2020 may be found on the Data and Intelligence, Health Protection Scotland or Improving Health websites.

Last updated: 20 November 2023
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