Nigel Lawson, Margaret Thatcher’s longest-serving chancellor of the Exchequer, once said: “The NHS is the closest thing the English have to a religion.” If that’s the case, then perhaps the religion is in need of a Reformation, because the English are becoming more agnostic and less evangelical. (The healthcare systems in Scotland, Wales and Northern Ireland are run by devolved assemblies, but are in no less of a sorry state.)
And who can blame the public for its loss of faith? Even before Covid-19 hit the UK in 2020 and battered our health infrastructure, the service seemed to be locked into steady decline. In 2010, there were around 2.5 million people waiting for NHS in-patient treatment. By 2020, before the pandemic, that had risen to 4.5 million. Since coronavirus hit, and elective surgery was delayed and postponed to make way for patients with the virus, the waiting list has ballooned to more than 7.5 million. One in five adults are now waiting for NHS care.
To understand the scale of the challenge that the Labour government faces – and to appreciate the length of Health Secretary Wes Streeting’s to-do list – it’s important, first, to understand the context. Fixing the NHS requires a detailed diagnosis and an examination of what policy choices got us into the state we’re in.
We used to think of the National Health Service as the envy of the world. But figures from the King’s Fund, a health charity, show that health outcomes in the UK are poor compared with other nations. We have higher avoidable mortality rates, driven by below-average survival for many major types of cancer, as well as poorer outcomes from heart attacks and strokes. France and Germany have two and three times as many hospital beds per person, respectively. The same research from OECD data found we had fewer doctors per capita than any of our western European neighbours, and fewer nurses than all but Portugal, Italy and Spain – countries with less economic heft and much lower spending power.
The raw numbers obscure what this means in practical terms, on the ground. Tens of millions of sleepless nights due to chronic pain. Tens of millions of workdays lost due to sickness and ill health. Extreme discomfort, worry, stress and unnecessary agony. There were around 10,000 excess deaths last year. In 2022, there were around 50,000. That means 60,000 premature funerals over two years, with 60,000 families grieving earlier than they should, missing precious years of life. Many analysts have laid the blame for persistently high mortality at ambulance waiting times, treatment delays, and queues at A&E.
Upon founding the NHS during the Labour government of Clement Attlee, Nye Bevan, the titan of the postwar Labour left and Attlee’s health secretary, said that “illness is neither an indulgence for which people have to pay, nor an offence for which they should be penalised, but a misfortune, the cost of which should be shared by the community”.
The principle of a universal health service, paid for through general taxation and free at the point of use, was a cornerstone of the British welfare state. The NHS survived the monetarist, free-market privatisations and deregulatory tides of the last 40 years, even as many of the other pillars of the social democratic consensus came tumbling down. But today, thousands are taking out loans for medical treatments rather than languishing on waiting lists. Some diagnosis companies are even offering treatments and directing people to Klarna – the controversial buy-now-pay-later app. The UK’s second-most treasured institution (after the fire brigade) creaks under the weight of demographic pressures, an ageing population and much else besides.
Where did it all go wrong?
Some think they can pinpoint a specific year – 2010. David Cameron’s government always claimed it would “cut the deficit, not the NHS” in an austerity drive aimed at returning the budget to surplus (something that was never achieved). In real terms, health spending was protected from the programme of fiscal tightening implemented by the chancellor George Osborne across the rest of Whitehall’s departments. However, the headline figures obscured what was happening beneath the surface.
Money and structure
A recent review led by the cross-bench peer and academic surgeon Ara Darzi looked in detail at the performance of the NHS. Published in September, it found that the NHS is in a “dire state”. Healthcare spending may have risen steadily in absolute terms under the coalition government and since 2015 but it has still been the most austere decade since the service’s founding in relative terms. Real-terms budgets have risen just 1 per cent a year, compared with a long-term average of around 3.4 per cent a year. Adjusting for population growth and age structure, spending has virtually flatlined.
Money isn’t everything. It matters – a lot. But the shape and governance of institutions also matter. Personnel matters. This is especially so in an unwieldy monolith such as the NHS, the largest employer in Europe, and one of the largest in the whole world. Paramedics, doctors, nurses and auxiliary staff have seen their real take-home pay deteriorate, contributing to a service-wide staffing crisis and mass emigration. The most popular destination for healthcare staff, particularly of doctors, is Australia.
Despite promising to “stop the top-down reorganisation of the NHS”, Cameron passed one of the most sprawling, wholesale NHS reform packages in the service’s history – the 2012 Health and Social Care Act. The British Medical Journal called it “unintelligible gobbledegook”, and Shirley Williams, leading the Lords’ opposition to the bill on behalf of the Liberal Democrats, said it was “so incomprehensible, so detailed, so long, [and] impossible to understand”.
The bill entrenched the internal market and competition between trusts, reducing the influence of the Department of Health and Social Care. In doing so, it created an alphabet soup of arms-length bodies such as the NHS Commissioning Board; Public Health England; clinical commissioning groups; the NHS Trust Development Authority; Monitor, a new regulator; and dozens of competing, financially independent foundation trusts. It all served to facilitate more public commissioning of private provision and the bidding for treatments and medical services under the NHS umbrella.
“Big, top-down reform programmes distract NHS attention,” Chris Thomas, head of the Institute for Public Policy Research’s Commission on Health and Prosperity, tells Spotlight. “It had the NHS essentially breaking itself up and reorganising itself… distracting the system and taking capacity away from delivering patient care.”
The bill was such a disaster that the health service only got through the pandemic by more or less abandoning its provisions, according to Dr Richard Murray of the King’s Fund. Speaking to Spotlight after the first lockdown, he said: “It really did ignore the 2012 act by coming together. Organisations were swapping staff, swapping resources and moving patients around… They didn’t compete – they cooperated.”
But problems with the bureaucratic, market managerialism imposed in the 2010s are not the whole story.
Capital spending
While day-to-day NHS running costs – spending on medicines, wages, electricity bills, everyday expenses – grew year-on-year even through the years of Osbornomics (and under Osborne’s almost equally parsimonious successor in the Treasury, Philip Hammond), the amount the government spent on capital fell dramatically. These are the longer-term investments – fixed assets such as buildings, machinery, computer systems, digitisation, laboratories, heavy equipment and the NHS estate – that increase capacity and improve productivity.
The Darzi review identified a £37bn capital spending shortfall over the past 15 years, which the NHS Confederation summarised as being one of the key reasons for the NHS’s “critical condition”, along with “the negative impact of the coalition government’s NHS reforms”.
“This is to some extent mirrored across the UK economy,” says Mark Dayan, a policy analyst at the Nuffield Trust, an independent health think tank. Multiple diagnoses of the UK’s economic malaise and productivity puzzle, from think tanks, economists and assorted experts, have consistently identified chronic underinvestment by both business and government as a key source of our relative decline. The theme is repeated so often that it’s hard to even call it a puzzle anymore: growth is anaemic and living standards have flatlined because we don’t spend anywhere near enough on increasing our productive capacity. This is a problem that applies across the economy, and the NHS is not excepted.
“We invest much less than any European or comparable countries,” Dayan tells Spotlight, “so stuff like the number of scanners is very low, the number of beds… and also the NHS has quite old buildings, with big, shared wards, and those buildings are often in a very bad state.”
Darzi’s report revealed significant capital underspend as well as capital budgets raided to cover day-to-day running costs throughout the decade leading up to Covid.
Social, primary and community care
Leaky roofs, ancient IT and out-of-date machines might be enough to deal with but hospitals are contending with external pressures, too. These are arising from separate but related crises in social care and primary care – and make additional demands on a service in which supply is already constrained. Social care, which falls under the responsibility of local authorities, was the subject of major cuts in the 2010s. Central government contributions to council budgets were drastically reduced in real terms, sometimes by more than half.
Some of this was recouped in higher council taxes, business rates, privatisations and councils’ commercial business ventures (which sometimes failed spectacularly). But core spending power remains constrained. If you’ve noticed potholes, closed libraries, closed sports centres, dirtier streets, cancelled bus routes, overgrown parks and an altogether shabbier public realm, that’s likely because more and more of your council’s budget is taken up by statutory spending on social care and children’s services, usually around 65 per cent. Councils cannot cope.
“We’ve had this kind of row-back on everything that keeps the population in good health and stops people needing the NHS,” says IPPR’s Thomas. Home visits, residential care and meals-on-wheels, among all kinds of services, have also faced significant cuts. That means “patients no longer flow through hospitals as they should”, according to Darzi, with 13 per cent of NHS beds occupied by “people waiting for social care support”.
Primary care, or general practice, is also in a state of disrepair. “It’s been under strain for a long time,” says Nuffield’s Dayan. “GP numbers for most of the last 15 years were going down, which given that the population was growing and getting older on average was an incredibly difficult situation.”
People are finding it much harder to get doctors’ appointments. GPs act as the gatekeepers for the whole system. But there’s a huge primary care bottleneck. Unable to see their local practitioner, and with continuity of care increasingly rare, many are instead letting health issues fester, making them more expensive to treat. Some are presenting in hospital at a much later stage, when the cost of treatment dwarfs the outlay that would have been involved for an earlier, community-based solution or early intervention by a family doctor. The Royal College of General Practitioners also reports that the share of health spending going on primary care is at its lowest level in eight years.
On top of all that, across the UK stagnant real wages, changes to the benefits system and a broken housing market all come with their own sets of health demands: almost half of primary care services now run a food bank.
Staffing and prevention: green shoots?
The new government has grand plans for the health service under the ambitious Streeting. Already, it has attempted to halt waves of strikes and negotiate pay settlements with NHS workers, hopefully beginning to stem the staff exodus and bring waiting lists down. Streeting promises a renewed focus on prevention to reduce demand, as well as claiming that only Labour can be trusted to push through radical reforms, “just as only Nixon could go to China”.
Earlier this month, alarming noises from the Treasury at first indicated that capital spending could be subject to further restraint by the Chancellor, Rachel Reeves. But since then, media briefings have been more likely to suggest that capital budgets and the NHS’s day-to-day spending are in for a major boost. The budget on 30 October is incredibly significant, for the country and the health service. Seeing a Labour government (with a former Bank of England economist in No 11) putting the squeeze on services because of an orthodox attachment to tight fiscal policy that not even the gilt traders and fund managers share, would provoke a serious question: what is a centre-left administration actually for?
“I do have sympathy with the idea that it took 15 years to get into this mess,” says Thomas – “and that it might take 15 years to get out of it.”
This article first appeared in our print Spotlight report on Healthcare, published on 25 October 2024.
Content from our partners
Related
