BACKGROUND

  1.  The previous administration established a target for expenditure on R&D of 1.5 per cent of the NHS Budget. This was before the introduction of the current NHS funding system in which the NHS Trusts were asked to declare how much they spent on or in association with R&D. This target was based on comparisons with the private sector which indicated that a typical proportion for R&D expenditure was between 1 per cent and 2 per cent of total budget[10].

  2.  In 1993, it was not known exactly how much was being spent on R&D in the NHS Estimates in 1995 suggested 1.2 per cent of total NHS resources were associated with R&D and this estimate was quoted in a Government response to a House of Lords Select Committee report. At that time, the Government stood by the target of 1.5 per cent set out in Research for Health[11].

  3.  However, it was also acknowledged, in evidence given to the Select Committee[12], that as information systems on NHS R&D funding improved we should not be enslaved by the 1.5 per cent target.

  4.  In the last three years, the NHS R&D Levy has represented the following percentage of totals for NHS resources:

  * Figures from Departmental Report on the Government's expenditure Plans for 1999-2000

DISCUSSION

  5.  The 1995 government response to the Select Committee said that one of the principles of the NHS R&D Levy was that R&D funding should remain on the historical pattern until improved information systems were in place. These information systems would cover R&D activity, costs, outputs and quality[13]. The NHS made its first annual reports on allocations from the NHS R&D Levy in 1999. The electronic National Research Register containing 50,000 records of research activities in the NHS (including some 20,000 current) was also launched in 1999.

  6.  1.5 per cent of total health spending in 1999-2000 was £596 million. Increasing R&D expenditure to that level would have meant reallocating £160 million which would otherwise be spent on patient care.

RECENT DEVELOPMENTS

  7.  A strategic review of NHS R&D funding was concluded in October 1999. Recommendations are currently under consideration by Ministers. The review made a number of recommendations for further improving information on R&D activity.

CURRENT POLICY ON THE LEVEL OF NHS R&D FUNDING

  8.  In these circumstances, we question the need for a financial target. We should work to ensure research in the NHS is of consistently high quality, and that the choice of research topics responds appropriately to the priorities and needs of the NHS.

  9.  The Government's aim is to ensure that there are enough resources to meet the Health Service's needs for research and its commitment to provide the NHS base for the national science effort. It takes account of the contributions of other funders of R&D in the NHS, including the research councils and medical research charities; as well as of the universities that provide the academic base for health research.

  10.  The level of funding through the NHS R&D Levy is kept under review to achieve these aims.

January 2000

10   See Research for Health 1993, page 6. Back

11   See Research for Health, Cm 2984 1995, paragraph 56. Back

12   See Medical Research and the NHS Reforms, Evidence 1994-95, HL Paper 12-1. Back

13   See Research for Health, Cm 2984 1995, paragraph 57. Back