The disease that most afflicts England’s National Health Service
On July 29th the new Labour government announced a pay deal with the British Medical Association that would give junior doctors in England a pay rise of 22% over two years. If accepted it will bring an end to the longest period of industrial unrest in the history of the National Health Service (NHS), which has led to the cancellation of almost 1.5m appointments.
The rationale, said Rachel Reeves, the chancellor, was simple. Settling the strikes will cost £350m ($450m), which is “a drop in the ocean” compared with the £1.7bn they have cost the taxpayer. Paying more may make sense for workforce reasons, too. In a health-care system that struggles to retain its staff, the agreement may stop some doctors from fleeing to Australia. But in other respects, the government seems less keen to take the longer view.
Short-termism is built into the NHS’s annual planning cycle. In order to stick to its budget, the NHS routinely relies on its trusts and Integrated Care Boards (ICBs), regional bodies that plan and commission services, to sign up to unrealistic targets. At a point in the year when the finances get particularly dicey—usually because of winter ailments, though last year because of strikes—the government somehow finds extra money. Even so, the combined deficit for ICBs was still estimated to be £1.4bn in the 2023-24 fiscal year.
These pressures now look set to worsen. The government this week accepted the recommendation of pay-review bodies to give public-sector workers, including those in the NHS, a raise of 5.5%. To help fill the hole left by these increases and other overspending, trusts will have to find more efficiency savings.
The result is likely to be yet more raids on NHS capital budgets, a practice that has already caused huge trouble. Britain spends far less on capital investments in health care than comparable countries. The NHS reckons that the cost of the maintenance backlog on its estates—already rising (see chart)—will exceed £15bn by 2028. Crumbling buildings are not just dangerous. They add to delays and inefficiencies. In one hospital, an intensive-care unit was recently closed because the roof fell in. In another, staff must wheel their patients outside between buildings.
Capital spending is being squeezed in other ways, too. A hospital-rebuilding programme worth £20bn was beset by delays in part because the last government allocated as little money as possible to the early phases; Labour now says it will review the whole programme. Measures designed to incentivise fiscal discipline can have perverse outcomes. Guy’s and St Thomas’ Foundation Trust in London has one of the largest estimated maintenance backlogs, at more than £400m. Because its ICB produced a deficit, even though the trust had a small surplus, its capital allocation has been reduced by £2m this year.
These are not the only symptoms of short-termism. Successive governments have dodged the costs of shifting the health-care system more towards prevention. There were 6.7m diagnoses of major illnesses in England in 2019; the Health Foundation, a think-tank, reckons there will be 9.3m by 2030. Wes Streeting, Labour’s health secretary, has long recognised that Britain should be spending less on hospitals and more on keeping populations healthier for longer. But Labour’s main manifesto pledge for the NHS was to ensure that within five years no one waited more than 18 weeks on hospital waiting lists, which now top 7.6m. Prioritising that measure means hurling more resources at hospitals, not fewer.
Cost-cutting has meant yet another delay to a planned overhaul of social care, where continued underfunding ratchets up pressure on the NHS. On July 29th Ms Reeves also cancelled a long-planned reform that would have capped the costs people pay for social care. Doing so will save £1.1bn in the first year but come at a steep cost to thousands of families. Sir Andrew Dilnot, an economist who first proposed the cap many years ago, has called the decision “a tragedy”.
In a recent report on the NHS’s finances, the National Audit Office warned of the “potential growing mismatch between demand for NHS services and the funding the NHS will receive”. On his first day in office, Mr Streeting said that the service was “broken”. Ridding it of short-termitis would be a good course of treatment. ■
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