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Hunt demands ‘challenging’ productivity improvements in return for training cash

Published on: 30 Jun 2023

The chancellor has told HSJ he has agreed “ambitious improvements in productivity” with NHS leaders as part of negotiations for the long-term workforce plan.

The plan – published today – has stressed that its proposed staffing increases are based on “a set of assumptions about demand, productivity and retention over the modelling period”, that if not met would mean the “shortfalls in NHS staffing would persist”. The risk posed by undertshooting the productivity target is calculated at between ”170,000 FTE to 215,000 full time employees. This would cancel out much of the impact of the forecast 300,000 extra clinicians promised by the plan.

The plan’s modelling is based on an “ambitious labour productivity [increase] of up to 2 percent (at a range of 1.5-2 per cent)”. It calls these expectations ”stretching” and “above the long-term trend).” 

However, the plan also makes it clear that the desired productivity improvements will be dependent on “two key factors”: a “sustained investment in NHS estate and equipment” and increase in funding for “technology and digital innovation”.

Achieving the plan’s productivity ambition “requires a combination of delivering care closer to home while avoiding costly admissions, achieving operational excellence, reducing administrative burden through better technology and infrastructure, and capturing the benefits appropriately in productivity measurement.”

It will also need ”continued and sustained investment in the NHS infrastructure, a significant increase in funding for technology and innovation, and the delivery of the broader proposals in this plan.”

Challenging, demanding improvements

In an interview with HSJ, chancellor Jeremy Hunt said the government wanted to see “challenging, demanding, productivity improvements” go alongside the increase in training places.

Mr Hunt said the NHS had agreed it was possible to make “ambitious” productivity improvements and the government would be asking it to come up with a plan as to how it is going to deliver these efficiency improvements.

“We need to sit down with the NHS and say, ‘How are we going to improve productivity because we are choosing to prioritise the NHS,”, Mr Hunt said.

“I prioritised it in the autumn statement, we’re giving [the NHS] bigger increases than we’re giving to any other public service. But we need to make sure that in return for that, the NHS gives the best possible value to taxpayers.”

However, he stressed the government was not asking “doctors or nurses to work harder”, but instead “work smarter”, describing inefficiency in the NHS as “more frustrating for people who work inside the NHS than it is for patients”.

When asked by HSJ if the government would commit to the two “key” investments in infrastructure and technology, Mr Hunt said he accepted that some improvements in productivity are linked to investments in IT and buildings, but said there are other factors such as “changing the model of care to a prevention lead model”.

The chancellor said the level of IT investment and capital spending would be decided in “spending review settlements going forward”.

“What we are committing to today is the additional training places over the next five years, we are making an exception, and we’re saying those will be funded in full, because we want to give the NHS the certainty that doctors nurses, the extra people are going to be coming on stream, which is what people want so much.”

Despite substantial increases in the total number of staff working in the NHS over the last ten years, activity has not increased in line with this and in some cases has fallen.

Mr Hunt said the “very good reason” for the fall in productivity was because of “a covid overhang”.

He added: “We understand that the NHS has been through the biggest trauma in its history with the pandemic. But we now need to get back to the normal business of treating the wide range of conditions… as efficiently and productively as possible.”

Salaries decided in spending reviews

The additional £2.4bn in funding, which the government says will pay for an expansion of training places by 27 per cent by 2028-29, does not include money for the salaries of additional staff who will join the service during this time.

Mr Hunt said: “The salaries of NHS staff are something that are decided in spending reviews, what I would say is, we’re not going to be training all these extra staff if we’re not intending to employ them in the NHS.”

In terms of the ongoing pay dispute, Mr Hunt said although he was “keen to get them resolved”, he wanted to look at the “root cause of the anger that’s causing people to strike, which is that we’ve had inflation that in recent months has been higher than 11%. And that’s eroding the value of people’s pay packets”.