When Politicians Run Hospitals, Maintenance Gets Cut
Britain kept the health service running day to day after 2008 by raiding repair funds, and Smith says state ownership made that choice easy to make.
Noahpinion · The UK is a cautionary tale for the U.S.Writing about Britain's long economic slide, Noah Smith, an economics writer studying what went wrong, stopped at a budget maneuver that looked harmless and proved corrosive.
Smith puts it this way: “It’s not necessarily that government is inherently inefficient; it’s that it’s inherently political.”
He meant what happened to the National Health Service, Britain's state run system in which the government owns the hospitals and provides care directly, after the 2008 financial crisis. Rather than stimulate the economy, Smith argues, the government cut spending sharply as tax revenue fell. As Idrees Kahloon, a writer for The Atlantic whose reporting Smith draws on, put it, “Funding for day-to-day NHS operations was maintained, for instance, but only by cannibalizing the capital budget,” the money meant for repair, renovation, and future capacity.
A 2024 government report described the result as “crumbling buildings, mental health patients being accommodated in Victoria-era cells infested with vermin with 17 men sharing two showers, and parts of the NHS operating in decrepit portacabins.” Portacabins are portable, temporary buildings.
Smith argues the deeper flaw is state ownership, not austerity alone. In most rich countries, he writes, the state pays for coverage and helps cover treatment bills, but does not run clinics itself. Britain does both. That helped hold down spending for a while, with outlays lower than peers for broadly comparable results, but it left maintenance hostage to politics. When money got tight, politicians protected daily services and let the cuts fall on capital spending, which was cannibalized to keep day-to-day operations funded.
He sees the same pattern elsewhere. Under Hugo Chavez, the former Venezuelan leader, Smith writes, the government “starved its own state-owned oil company of capital investment” to pay for government largesse, “with predictably disastrous results.”
Questions people ask
What does a hospital capital budget actually pay for?
A capital budget pays for buildings, major equipment like scanners, information systems, and upkeep. Cutting it rarely closes a clinic tomorrow, so it is politically easier than cutting staff or services, but the decay compounds and later repairs cost far more.
Is Britain's health system really cheaper than America's?
Yes, on standard comparisons Britain spends less per person on health than France, Germany, and the United States, while life expectancy and many treatment outcomes were historically close. Smith’s point is that the savings came with a hidden liability in worn out facilities.
Does the United States have anything like direct government care?
The VA owns hospitals and employs clinicians, like the NHS, while Medicare is mainly insurance that pays private providers. That is why Smith suggests the American debate is mostly about insurance models, not direct government ownership on the British scale.