The Impact of Devolution on Local Health System Financing: A Synthetic Difference-in-Differences Study of Greater Manchester, England

Document Type : Original Article

Authors

Health Organisation, Policy and Economics (HOPE), Centre for Primary Care and Health Services Research, The University of Manchester, Manchester, UK

Abstract

Background 
Determining the effects of devolution policies through health system financing is pivotal in understanding their impact. Few existing studies have considered total health and care system expenditure, overlooking the transfer of resources through spending in different services locally. We evaluated the impact of devolution in Greater Manchester (GM), an area in England which received devolved health and social care powers from 2016, on the whole system of local public expenditures on health and care.
 
Methods 
Using data on public health and care spending for 149 local health systems between 2013 and 2020, we estimated synthetic difference-in-differences (DiD). We compared expenditure in total and by services for ten GM localities relative to a weighted combination of localities from the rest of England (excluding London) for four years post-devolution. We analysed expenditures in per capita terms and as a share of total expenditure. We investigated dynamic effects with an event study specification.
 
Results 
Compared with the synthetic control (SC) group, total annual expenditure on health and care increased in GM post-devolution by an average of £66.58 per-capita (95% CI: 11.85 to 121.30). Total expenditure on public health and social care, managed by Local Authorities, increased by £36.39 (95% CI: 6.99 to 65.80) and expenditure on social care specifically increased in the third and fourth years after devolution. We detected some short-term changes in expenditure managed by the National Health Service (NHS) Clinical Commissioning Groups (CCGs), including reduced expenditure on Continuing Healthcare and increased expenditure on acute healthcare and “other” miscellaneous expenditure. We did not detect a statistically significant effect for public health, primary care, community or mental healthcare.
 
Conclusion 
Results suggest that additional resources were used to respond to existing pressures on the health system, and that to redirect expenditure substantial increase in resources or re-organisation of services may be required alongside devolution of sufficient powers.

Keywords

References

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History

  • Received Date: 09 July 2024
  • Revised Date: 20 July 2025
  • Accepted Date: 20 August 2025
  • First Published Date: 25 August 2025
  • Published Date: 01 December 2025

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