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At this year’s Byline Festival, I was on a panel with Lord Victor Adebowale and Professor Deborah Christie discussing this very theme, just two days after the General Election. Subscribers can access the recording here.
It’s a great question, but my starting point was that whilst it does need more than “just” (more) money, the money really matters. And without it, the services will have to do fewer things for fewer people and the public will have to accept a struggle to deliver anywhere near the standard of service they could reasonably expect and which was the norm in the decade before the 2010 election and the year or two beyond it.
Declining NHS Performance
The decline in performance since is not anecdotal. It is illustrated very clearly in the national performance data.
The 2023 Institute for Government report ‘The NHS Crisis. Does the government have a plan?’ and Professor Chris Ham’s Report for The King’s Fund ‘The NHS 2000-2020. Rise and Decline‘ set out in some detail the story of vast improvement during the Blair/Brown government and progressive decline since, to the point where we have undone those gains. In the wake of the election result the Nuffield Trust’s policy lead, Mark Dayan posted an excellent thread on the worsening performance and underlying strengths of the system on X.
Towards the end of the last Labour administration in 2009/10, the annual social attidues survey showed higher levels of public satisfaction with the the NHS in England that at any point before or in subsequent years since in over four decades of reporting.
This was mirrored in the highest scores on the annual staff satisfaction survey with those working in the NHS. These have also plummeted since Labour were last in office and in the last two years have reached a nadir. It is any surprise that with morale low and disputes over terms and conditions, we have a serious staff retention problem?
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The sustained focus on access and wait times over the previous decade had drastically improved A&E performance with over 90% of patients assessed, admitted or discharged within four hours, and 12 hour waits a thing of the past.
Waits of months or years for elective care were largely over due to effective referral to treatment time targets and monitoring and there were only two million people on waiting lists, not the current 7.6 million. Performance against the two week cancer wait was good. And consistent speed of access to general practice appointments was unrecognisably better than the new normal in 2024.
The NHS ranked well on international league tables such as the Commonwealth Fund’s annual report although there was still big room for improvement on certain disease outcomes.
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After 14 years of Conservative-led government, the NHS is now failing to hit a whole range of Key Performance Indicators and both recorded staff and patient satisfaction are at a new low.
When new Health and Social Care Secretary, Wes Streeting MP said on his second day in Office that, “the policy of my department is that the NHS is broken” this divided opinion. But I commend his honesty. Whilst many brilliant staff do fantastic work, the evidence is in plain sight and for too long we have failed to be honest about this.
It’s not all about the money but the money does matter
Whilst not the only enabler, money was a big part of that success.
Over the lifetime of the NHS since 1948, the average real terms annual funding uplift has been 3.4%. From 2000 to 2010 it was 6% – the highest in the service’s history.
From 2010-2019, it was 1.4 % – the lowest in the NHS history. And even since 2020, in the wake of the Covid pandemic we have yet to return to those historic averages.
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You will hear politicians and commentators on the right say that “record levels of funding” are going into the NHS and that it is a “bottomless pit” that “requires radical reform”. But the absolute cost of healthcare inevitably rises with population growth, ageing demography, a rise in the number of people with long term conditions, rising costs of treatment, facilities and wages. So it is a meaningless statement in isolation.
Health Foundation analyses showed that if we’d kept up with the average across 14 EU nations from 2010 to 2019, when we spent around 20% less, it would have meant an additional £40 billion a year in the UK’s total healthcare budget. And that from 2015 to 2024, the Public Health Grant to local authority public health teams had been cut by 28% per person.
And not just money for the NHS but for social care and public health
The same coalition and Conservative government austerity policies that hit the NHS hit local government and hence social care even harder.
The Health Foundation estimated that real terms spending per person in adult social care had fallen by 12% in the decade from 2010/11.
A Commons Library report in 2024 shows that it occupies an ever greater proportion of local government spending due to sustained cuts in other areas, which in turn have partly stemmed from major reductions in support grants to local authorities. These cuts have hit the most deprived areas hardest as they often struggle most to raise money from council tax, business rates or social care precepts despite having higher levels of need.
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The Health Foundation estimated in 2021 that by 2030 we would need an additional £8.9 billion a year just to maintain current levels of (already heavily rationed and means-tested) access to social care and £14.9 billion to restore it to 2010 levels.
The latest Local Government Intelligence Unit survey showed serious strains across local authorities with one in ten “about to go bust” and the Resolution Foundation recently reported a £33 billion hole in public finances putting a range of services at risk.
How the money is spent and used does matter
There has been considerable talk from politicians on the need for greater productivity gains in the NHS – which have flat-lined in recent years.
Promising or willing better productivity to ensure maximum value for each pound spent is not the same as delivering it, though. The underlying reasons for falling and variable productivity and the potential solutions are various and complex.
They include a lack of physical capacity and space for work, an ageing and crumbling estate, poor investment in high quality and interoperable IT to support staff and services, and in equipment for diagnostics and procedures.
Analysis in 2023 from the NHS Confederation has shown that the NHS spends a lower proportion on capital expenditure for kit and facilities than systems in other industrialised nations. Capital budgets have repeatedly been raided to prop up operating revenue. This is counterproductive shorttermism, writ large.
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The NHS also spends a far lower proportion on managers than most systems and, despite “cutting the number of managers” being an easy political soundbite, it is counterproductive. We need high quality management and support staff and good operational data and insight to help improve services. Managers have been shown to add value and improve safety and quality of care in major evidence reviews in 2022 by the Universities of York and South Bank.
Productivity and NHS performance are also harmed by workforce issues – whether retention, recruitment, morale or sickness rates. The NHS annual staff surveys for 2023 and 2022 have shown morale at the lowest recorded points. Sickness rates are far higher than before the pandemic and many clinical staff are leaving or signalling an intention to do so. Staffing gaps and burnt out staff are not good for safety or sustainability of services. High numbers of staff also felt unable to raise concerns about safety or experiencing bullying or abuse.
And whilst Terms and Conditions are not the whole story, independent analyses from the Nuffield Trust and the Financial Times has shown serious reductions in real terms pay for NHS staff over the past 10-15 years and a growing gap with other workforce groups or sectors.
It has proved a false economy not to plan for the workforce, not to train more of our own staff and not to do more to retain them. And the harm to international recruitment from Brexit and Points-based immigration rules has not helped.
Many of these issues were set out as part of the 2023 NHS England Long-Term NHS workforce plan, which the Labour party appear broadly committed to.
There is also the issue of public money going straight into the pockets of for-profit private providers and contractors and lengthy PFI contracts.
Where the money is used also matters
Both waiting lists and waiting times for elective secondary care (i.e. planned outpatient appointments, investigations, procedures and operations usually in or at hospital trusts) are of very high interest to the public, politicians, media and NHS senior leaders.
The same applies for urgent and emergency care, whether ambulance response times, long waits and overcrowding in emergency departments and pressurised acute hospital beds.
Because of this high visibility and the relative power, size and status of hospitals, the proportion of money we spend in hospital care remains high. Whereas for instance only 8% of the total NHS budget is spent on primary care, despite access to GPs and Practice Nurses also being an issue of key importance to the public and a high profile struggle right now.
Wes Streeting has already pledged to increase the proportion of resource spent on primary and community care, but without saying what hospitals or other services must then stop doing to fund this. And the total adult social care spend is only around one sixth of that on the NHS.
It is an absolute policy truism, mouthed by everyone who is anyone for many years that we need to invest more in upstream prevention of ill health and health inequalities, the tackling of wider determinants of ill health such as housing, poverty, education, early years, food, drink, smoking, drugs obesity and lack of exercise, but we have consistently failed to invest in those policy areas, despite the platitudes and broad un-costed, unfunded ambitions.
The same applies to mental health services. They have tended to be a poor relation to physical health, with ambitions not backed by investment or staffing increases, through the Labour manifesto does acknowledge this disparity and pledge to improve things.
And to community health services to provide “care closer to home” and “upstream” or “downstream” of hospital so that coming to hospital or getting stuck there are not default options and so that we can invest more in keeping people well and helping them live with long term conditions
But all this needs investment, staffing and prioritisation, even if it means shifting resource away from hospitals which are now perpetually rammed full and pressurised – partly due to the NHS in England having the smallest bed base per capital in OECD nations and partly due to the lack of capacity in those other services and the lack of investment in prevention and population health
So yes, the NHS needs more than money. It needs better deployment of the money it gets and more medium and long term thinking. But the money does matter.
What financial investment has the new government promised so far?
I understand the rationale for Labour’s election strategy of avoiding big un-costed or unfunded promises.
But ultimately, despite Streeting’s desire to improve productivity and Labour’s wider commitment to economic growth, without additional investment, it will be hard to improve or even protect health and social care services and we’ll need some realistic expectation management or tough choices.
The total spending commitments across all elements of the Labour Manifesto were costed by Sky’s Ed Conway at around £10 billion. The Institute for Fiscal Studies said that the amounts pledged to public services were “tiny, bordering on trivial”.
Yet the NHS alone has a budget of £181 billion and Social Care spends another £28 billion.
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A 2024 Nuffield Trust analysis of the manifesto spending commitments found that Labour’s would in effect be little different in real term uplifts from the Conservative austerity years and without the money to deliver on the workforce expansion promised in the NHS England Long Term Workforce Plan.
And despite a whole range of welcome policy ambitions, the only costed and funded commitments specific to the NHS were on an additional two million elective appointments per annum (out of circa 150 million) to help reduce waiting lists, for 8,400 additional mental health staff and for an additional 700,000 dental appointments.
All welcome, but many other goals and pledges in the manifesto came with no promise of additional money.
We can only hope that now Labour have a supermajority and are keen to cement it by visible progress on key public services and especially the NHS, that they will gradually release the purse strings.