Workforce priorities

The NHS is facing unprecedented challenges: it is seeking to transform services to meet the fundamental changes in population needs as society ages and chronic mental and physical health problems become ever more prevalent. Transforming a service as important and complex as health care would be a challenge at any time, but to do so during a decade in which funding is growing more slowly than at any point in the history of the NHS makes that essential transformation process even more difficult.

Health care is a people business – the NHS employs over 1.3 million people; social care even more. Combined, they employ around 10% of the UK workforce. The health care workforce is highly skilled – doctors, nurses and allied health professionals account for over half of those working in the NHS and require education and training to graduate level and beyond. It is also an expensive workforce and over two-thirds of hospital budgets are spent on pay. NHS and social care average earnings per person are 16% higher than average earnings across the economy as a whole.

How well the NHS is able to recruit, retain and mobilise the workforce to deliver the best care as cost-effectively as possible is fundamental to a successful and sustainable health system. The task of transforming services, which the NHS in England set itself with the Five year forward view (FYFV), is now being taken forward through 44 local sustainability and transformation plans (STPs). This transformation will only be achieved through the active engagement of the workforce. It will require a different mix of skills and staff as services move from an acute, curative focus to more prevention and proactive management of complex patients with multiple long-term conditions in community settings.

The current policy of NHS funding constraint places major limits on the scope for policy manoeuvre on NHS staffing, both locally and nationally. The Health Foundation’s 2016 report on the profile and features of the NHS workforce in England, Staffing matters; funding counts, emphasised that there is an essential and continual policy interconnect between funding and staffing, but that too often funding and workforce policy are disconnected. The report argued that the NHS lacks an overarching workforce strategy that can support the FYFV.

Staffing matters; funding counts used the labour market frame to illustrate the interconnected nature of policy and the need to be clear about the effects – anticipated and unintended – of any policy intervention. It also highlighted that the NHS has an uneven track record in taking account of the full impact and implications of new health workforce policies.

We will follow up Staffing matters; funding counts later in 2017 with an updated look at the workforce of the English NHS. Before then, however, it is clear that the lack of a coherent workforce strategy, integrated with funding plans and service delivery models, is an Achilles heel of the NHS.

The FYFV set the NHS in England the task of delivering annual efficiency improvements of 2–3% a year. NHS Improvement’s analysis shows that acute hospital efficiency improved by an average of 1% a year in real terms between 2008/09 and 2014/15. Over the next few years the NHS will have to substantially accelerate the drive for efficiency improvement if it is to sustain the quality of care and access to services.

Health care is a people-intensive sector and improving labour productivity is essential to drive improvements in overall efficiency on a sustainable basis. Over recent years, the NHS has often looked to one-off initiatives to improve efficiency. A prime example is the abolition of strategic health authorities (SHAs) and primary care trusts (PCTs), which reduced the cost of commissioning and system oversight. This approach was appropriate when the government thought that austerity would be relatively short-lived, but the NHS is facing at least a decade with funding growth of around 1% a year above inflation, compared with rising pressures of around 4%. This gap can only be bridged through sustained improvements in the underlying productivity of the health service.

The FYFV is seeking to deliver savings of £22bn across the NHS. Workforce issues underpin much of the approach to realising those savings. Figure 1 sets out NHS England’s breakdown of the £22bn of savings. Almost £7bn is to be delivered nationally – principally through continued pay restraint. Capping NHS pay increases to 1% a year until 2019 is the largest single element of this national contribution to efficiency. The remaining £15bn of savings are to come from the NHS locally. Of this, £8.6bn needs to be delivered through improvements to the productivity of secondary care providers (mainly acute hospitals).

Figure 1: Sources of the proposed £22bn in efficiency savings as at the beginning of 2016/17

Figure 2 shows how the staffing of the NHS has changed over the first six years of the NHS’s decade of austerity (2010–2015). The overall number of staff employed by the NHS is broadly unchanged and has not kept pace with growth in activity.

Figure 2: Change in the number of full-time equivalent staff by occupational group, March 2010–2016

Although aggregate total numbers of staff have been broadly constant, the NHS in England has seen a substantial shift in the mix of staff groups employed by the NHS through this period. Infrastructure support staff numbers have fallen sharply so that the NHS has an increased proportion of clinical staff. Within the clinical staff category, the number of full-time equivalent consultants has increased by more than a fifth over six years, while the number of nurses has risen by just over 1%.

Pay restraint and reductions in headcount for groups such as infrastructure staff have been important planks for achieving financial balance over recent years, but they do not represent a long-term strategy to achieving sustainability or delivering change. Research in the Health Foundation’s recent report, A year of plenty?, found that this rapid change in skill mix has been associated with falling productivity in NHS acute hospitals. The research estimated labour productivity in 150 acute hospital trusts between 2009/10 and 2015/16 and looked at the productivity of consultants specifically. It found that labour productivity for all staff groups fell by an annual average of 0.7% and the productivity of consultants by 2.3% a year (see Figure 3).

Figure 3: Annual change in consultant and all staff labour productivity in 150 NHS hospitals, 2009/10–2015/16 (%)

All 44 local areas in England have now produced STPs, which set out how they will transform services while achieving financial balance over the period to 2020/21. The King’s Fund has analysed all 44 plans and found that workforce issues figure in the plans in a variety of ways. Firstly, some areas are focused on tackling staff shortages. There are stated ambitions to reduce staff sickness and reliance on agency workers. More fundamentally, many STPs are seeking to significantly shift the balance of services, with major staffing implications. The King’s Fund report that the Nottingham and Nottinghamshire STP proposes changes that suggest a 12% reduction in numbers of band 5 nurses and similar roles, while at the same time proposing a 24% increase in the community and primary care workforce over the next five years. Other STPs are seeking to create new roles that span boundaries between staff groups across health and social care. Some STPs are beginning to consider how to use the apprentice levy to create new opportunities for local populations. Although many STPs have some interesting and ambitious proposals for workforce, it is still not clear how these ambitions will be supported by national workforce planning and policy decisions to have any impact by 2020/21.

The FYFV was published in October 2014 and set out the ambition to shift services to primary and community-based care. While funding for general practice is planned to increase by 2.8% a year in real terms from 2015/16 to 2020/21, GP capacity remains a real issue. The number of full-time equivalent GPs working for the NHS fell by 3% between September 2014 and September 2016. Similarly, the number of community health nurses has decreased by 14% since 2009.

A year of plenty? reinforces the need for integrated, whole system workforce planning. It finds that hospitals with a higher proportion of nurses have higher consultant productivity. Increasing the proportion of nurses in a hospital by 4% was associated with 1% more activity per consultant. A more balanced rise in staff numbers among different staff groups may ensure that the NHS uses consultants’ skills effectively. The government recently announced that it would further expand the medical workforce with 1,500 more medical student places over the coming years. This was in response to concerns about the NHS’s reliance on overseas-trained doctors. But this could have been an opportunity to look at the impact of Brexit on the training needs for all staff groups and make sure that the future supply of NHS staff is balanced between staff groups. As the NHS Pay Review Body (NHSPRB) highlighted in its 2017 report, almost a third (32%) of new nurse registrations in 2013/14 were by people from other EU countries.

In April 2017, the House of Lords Select Committee on the Long-Term Sustainability of the NHS concluded that the lack of a comprehensive, national long-term strategy to secure the appropriately skilled, trained and committed NHS and care system workforce is the biggest internal threat to the sustainability of the NHS.

The March 2017 Budget, and the accompanying economic forecast from the Office of Budget Responsibility (OBR), highlights that the financial context for NHS transformation is unlikely to change soon. The economic forecast projects public sector net borrowing of 0.7% of GDP at the end of the decade. If the government is to achieve fiscal balance in the next decade there will need to be a further period of public spending restraint and/or tax increases beyond the current spending review period.

Given the centrality of pay and nursing numbers to the NHS’s workforce, financial and service sustainability we have identified two particular issues that merit immediate consideration: NHS pay and nurse staffing. We have analysed these in more detail in pressure point supplements, but summarise the key points here. These pressure points reflect issues that have had recent national policy attention, but where there is continuing concern.

* See www.health.org.uk/publication/staffing-matters-funding-counts

† Available to download from www.health.org.uk/publication/year-of-plenty

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