ABSTRACT
A crucial financial feature of the National Health Service (NHS) has been the dominance of general taxation as the principal source of funding for the Service. A key implication of this mode of finance is that NHS funding is governed by de facto competition between spending departments for a share of public expenditure. Such competition is a central theme of this chapter, which examines the determinants of parsimony in NHS expenditure during the 1950s. The thesis advanced is that a key aspect of such parsimony was a political irony. The NHS lost out in the competition for resources because it was a ‘political success’. In contrast, education was an area of perceived political ‘failure’ and increased expenditure was a means of addressing the political threat stemming from this ‘failure’.
