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‘Catastrophic’ fall in managers linked to slump in NHS productivity

Published on: 14 Jun 2023

A “chronic” lack of managers sits at the heart of the fall in NHS productivity, a report from the Institute for Government has claimed.

The report said data collected by the Office for National Statistics showed NHS productivity had risen steadily from 2003 until 2018, apart from a dip in 2009. However, since then, the NHS has been delivering less care in many areas despite “rising spending and higher levels of staffing”.

The report claimed that, while the pandemic affected productivity, it is not the root cause. Instead, it puts forward three main sets of reasons.

The first reason is lack of hospital beds, poor diagnostic capacity and the undernourished care sector. Capital spending rules exacerbate the first two as they make “it harder to increase physical capacity, even as staffing numbers rise”.

The second set of reasons involves the composition of new staff. The report said increased retirement and resignation rates meant “experienced practitioners are [often] being replaced by junior staff” who do not have the experience or authority to make necessary decisions.

The report also noted recruitment of “newly qualified, and slightly more experienced nurses… has not kept pace with the growth of junior and senior staff”; and many senior consultant roles are going unfilled because of a lack of applications.

The IFG’s research also suggested “new clinical staff are not always being deployed to the teams where the bottlenecks in patient care tend to pile up, such as diagnostics”, and “vacancies are worst in the areas most important for productivity”, such as anaesthetics.

The third set of reasons is linked to management numbers and incentives. The report also makes clear recruitment of managers has “not kept pace with the influx of new clinical staff, which in turn means these new staff cannot be used to their full potential”.

The report stated: “NHS workforce data shows the total percentage increase in managers between December 2019 and December 2022 was just 7.7 per cent – but there was actually a 7.2 per cent reduction if tracing the figures back to September 2009.”

By comparison, professionally trained clinical staff (HCHS doctors, nurses and health visitors, ambulance staff, and scientific, therapeutic and technical staff) increased by 11 per cent between 2019 and 2022, and by 25 per cent since 2009. 

The report continued: “Since 2009, the percentage of managers in the NHS has reduced from 2.6 per cent of all staff to 1.9 per cent (equating to 1,600 fewer managers overall). This compares with 11 per cent of staff employed in management roles in the overall economy.”

The IFG concluded the NHS “is catastrophically undermanaged” and “the headline-seeking focus on new front-line staff (itself with its own issues) has come at the expense of managerial staffing numbers”.

This, said the report, is “a deliberate choice” as “politicians like to promise front-line staff, [but not] more managers. [Their] instinctive view [being] that managers increase bureaucracy and fail to improve performance”.

The report countered: “This notion that reducing managerial staff would somehow ‘free up’ front-line operations is not supported by the broader management literature. The academics behind the World Management Survey have found that ‘around half of the faster productivity growth between the US and Europe in the decade after the mid-1990s could be accounted for by managerial differences’. Hospital-specific studies have found a strong association between good ‘management practices’ and better clinical and financial outcomes.”

However, the IFG warned: “The evidence is that increasing managers within the current system, without any other changes to that system, may not make a huge difference.”

For any increase in management capacity to have an impact, the reports said the NHS must ensure managers “have appropriate responsibility and autonomy”, possess “sufficient analytical capacity” and are working to “relevant targets and incentives”.