The 2024 Budget and NHS productivity
The Health and Social Care Secretary, Victoria Atkins, spoke at the Nuffield Trust Summit about the Budget and NHS productivity.
Good morning everyone, what an absolute pleasure it is to be here at the Nuffield Trust.
This is one of the landmark moments in the calendar of a Secretary of State for Health.
I know that I am about to be scrutinised - and indeed cross examined – by some of the country’s leading experts in healthcare.
So, believe you me, this makes Jeremy’s outing at the Budget yesterday feel very easy in comparison.
But can I thank the Nuffield Trust for inviting me to speak to you today – it is a great honour.
But it is also a privilege.
Because the National Health Service is, genuinely, one of the reasons I came into politics.
And today, having the privilege of speaking to you – those who work in healthcare, but also who are very, very conscious of its future, of the challenges we face today, but also our determination to prepare it for the years and decades to come, I would like to have a little bit of intellectual freedom to look at its future in a different light.
Our national conversation around healthcare has tended to focus on older people, who are living longer, and with more health conditions.
And later this afternoon the Chief Medical Officer – the wonderful Chris Whitty - will outline how we’re supporting them to live more independently, and with more years in good health, and rightly so.
But I think there is a set of voices that is not heard often enough – the voices of young people.
Young people not only pay for the NHS of today, but they will also use the NHS of tomorrow.
And we know that high costs of living and rising rents are making it difficult for our young people to make those long-term decisions that are so important to us all, such as buying a house or starting a family.
We cannot therefore expect them to foot the bill for an infinite increase in healthcare spending.
The Chancellor’s Budget yesterday rightly recognised that we cannot continue to have a larger tax burden falling on a smaller number of working people.
For me, the path we must take is obvious.
We must build a more productive state, not a bigger one.
And research proves this point.
Today there are 3.3 workers to support every pensioner.
In less than 50 years, there will be fewer than 2 workers to support every pensioner.
So, we need to stop the next generation being dragged into a tax and spend black hole - where they put more in to get less out.
Because this is a recipe not just for them losing faith in the institutions that we hold so dear, but also I worry for losing faith in capitalism, and losing faith in our democracy.
But the decisions we took in yesterday’s Budget will make a meaningful difference.
We took decisions that will reduce long-term demand, and improve productivity - not just throughout the NHS, but across the economy.
Because the two go hand in hand.
A strong economy helps pay for the NHS.
And a strong NHS supports a growing economy.
So today, I want to share our plan to achieve both of these things through productivity and accountability.
But before I do that, there is of course one topic that is fundamental to my plan to reform the NHS to make it faster, simper, and fairer – and that is prevention.
In the coming weeks, I will set out further thoughts on this very important topic.
But I hope you’ll forgive me, following yesterday’s incredibly significant announcement at the budget, I wanted to focus today on productivity and how it can make meaningful changes to the NHS that we all want to see.
Now, to productivity.
I know that you’ve heard about this already.
And indeed, Thea Stein has observed that NHS staff and clinicians don’t get out of bed in the morning thinking about how they could be more productive.
I get that.
They are motivated by doing the very best they possibly can for patients. And that is the way it should be.
So when I talk about productivity, this is not about telling staff they need to work harder.
It is about giving them the tools - and the time - to give patients the best care they can.
Now, we know the NHS can be productive.
From 2010 to the start of the pandemic in 2020, productivity growth in the NHS outstripped the wider economy by more than 1 per cent a year.
But since then, it has gone into reverse.
The causes are complex.
The pandemic has clearly increased demands on staff, and spending on agency staff has risen as a result.
Our Long-Term Workforce Plan, the first in NHS history, will get this spending in check - reducing it by as much as £10 billion over time.
And we should also be frank about the significant problems and pressures that industrial action has caused across the system…
…including, sadly, the 1.4 million appointments and operations that have been cancelled since strikes began in December 2022.
Nonetheless, a reasonable and fair deal can be struck, and I’m really pleased that unions are recommending our new offer to NHS consultants.
Should their members accept this deal – and I hope they will - we will all be able to move forward with providing patients with the care they need and see waiting lists fall.
But the Budget will deliver savings for everyone who works in the NHS.
The 2p cut in National Insurance will grow the average nurse’s pay packet by more than £500 a year.
This is on top of the National Insurance cut that we’ve already delivered this year, that taken together will benefit the average worker by more than £900.
But the Budget went further.
As well as helping the NHS meet the pressures it will face in the coming years with an additional £2.5 billion, it set out our determination to return to the productivity we all know the NHS has – and can – deliver by funding a £3.4bn capital investment plan to invest in technology.
The productivity plan, along with the Long-Term Workforce Plan, will see productivity grow by 2 per cent per year.
Meeting and exceeding the growth we saw in the last decade, and unlocking £35 billion of savings by the end of this decade.
We will digitise operating theatres, opening up an extra 200,000 operating slots a year.
We will set up a new NHS staff app, making it easier to roster electronically and ending the use of expensive off-framework agencies.
We will update IT systems, giving our doctors and nurses millions of hours back to spend with patients; rather than on hospital computer screens or computers on trolleys.
We will support every hospital to use electronic patient records, making the NHS the world’s largest digitally integrated healthcare system.
And we will improve the NHS app so patients can use it to confirm and modify all appointments.
This will increase choice, reduce the number of missed appointments by half a million every year, and make the NHS app the front door for prevention as well as for cure - somewhere patients can book vaccinations and access all their preventative tests in one place.
This productivity plan will make life simpler for staff and cut waiting lists for patients.
And it is our responsibility – and I would go as far to say, it is our duty – to prepare the NHS for the future.
This is why we want to seize the opportunities of AI for the benefit of our health.
It has already revolutionised stroke care across the NHS – halving the time it takes to treat people and tripling the number who recover to reach functional independence.
Now, we will use AI to potentially cut in half the form filling by doctors and nurses. And upgrade over one hundred MRI scanners across England, so that more than 130,000 patients a year can receive their results faster.
This will allow them to start treatment sooner, free up clinicians to spend more time with patients who need them most, and save taxpayers money.
And so that’s what I mean when I say that technology can make our NHS faster, simpler, and fairer.
As well as improving performance across primary, secondary and community care, technology can also strengthen social care – keeping people out of hospital and helping them live well at home.
This is what the Accelerating Reform Fund is all about.
It provides local authorities with £40 million of government funding to invest in the most innovative new technology to help look after older people.
Whether that’s through introducing new digital tools to boost recruitment and retention, or increasing social prescribing, which can reduce costs and help people build connections with their communities.
Our Long-Term Workforce Plan set out that NHS productivity growth of between 1.5 and 2 per cent was possible.
And thanks to the productivity plan we announced yesterday, Amanda Pritchard has committed to delivering 2 per cent.
It will be challenging, but if we work together, we can get this done.
Today, I also want to send a clear message about accountability.
Trusts, ICBs, regional boards, and NHS England are responsible for billions of pounds of taxpayers’ money.
It’s not our money, it’s not government’s money.
It is the money that all our nurses, porters, receptionists, as well as shop workers, waiting staff, and the self-employed have earned and then paid to government from their wages.
It is therefore our duty to ensure that this money is spent as well as possible.
Poor performance cannot be tolerated, and good performance must be rewarded.
To achieve this, by the summer, NHS England will start reporting against new productivity metrics, not only at the national level, but also across integrated care boards and trusts.
And I want us to go further - because I’ve listened to you - by introducing new incentives to reward providers that hit productivity targets.
So, I want to see providers retain the surpluses they generate through productivity improvement, and reinvest them in frontline services to support the clinicians who made these savings possible.
Now of course, accountability extends beyond productivity to all of the work that the NHS does.
I have been very honest about my own experiences of the NHS.
I have received great care, but I have also seen some of the darker corners of our health system.
And technology and the data it will produce, can be used by the public, as well as professionals to shine a light on poor performance.
Care will not just be scrutinised by committees of MPs in dusty, ancient committee rooms in the Palace of Westminster, it will also be scrutinised by the public on their phones.
This is what digital natives expect in every other area of their lives, and healthcare should not lag behind.
Now we’re already making progress.
People can find out how their local trust is performing with a few taps on a screen.
Quite rightly, the pubic expect to receive the best care, and that care should not be prescribed by where they happen to live.
And I say this of course as a proud Lincolnshire MP, which is a very different healthcare proposition from central London or central Birmingham.
Postcodes can still determine the speed and quality of care.
This is seen starkly in waiting lists.
The long hangover of the pandemic must be tackled and waiting lists must be cut.
Yet half of the NHS’s longest waits are concentrated in just 15 trusts.
And in those trusts, the longest waits are centred on particular specialities, such as gynaecology or orthopaedics.
Now, we are giving patients who have waited longest the choice to transfer to another provider.
But that cannot be the only solution.
And so, my ministers and I are working with NHS England to support those trusts to improve, but also to hold them to account.
In urgent and emergency care, it’s a similar story.
In January, just 15 trusts made up over half of the hours lost to ambulance handover delays, and just 13 trusts met the interim target to deal with 76 per cent of urgent and emergency patients within four hours.
This can - and must - change.
We have a range of tools to help trusts. From support from NHSE, to lending resources and people as well as peer support.
Because we all recognise that is often the best way to drive up standards.
And there should be rewards for success.
That’s why NHS England will once again offer additional capital funding to Trusts who exceed their emergency targets.
And if I may, I have been concerned when I hear of a few, only a few, ICB leaders who apparently do not consider it part of their job to speak to local Members of Parliament, people who represent local communities, or to explain their funding decisions.
As someone who is - I promise you - very accountable to the public, we have to recognise that as public services are funded by the public, for the public, that attitude is not acceptable and must change.
Now, as part of my focus on spending taxpayers’ money well, I am bringing commercial expertise into the Department of Health and Social Care to help drive results for us as a department.
Steve Rowe, the former CEO of Marks and Spencer, has led a lot of work within the department to streamline our processes.
And today, I’m delighted to announce that Steve is joining the department as one of our Non-Executive Directors, with a remit to accelerate delivery, and ensure the productivity plan, which is fully funded, improves care throughout England.
Conclusion
Now, I started my speech with young people – and the pressures they face – but also the need to meet the future with confidence.
We can do this.
We are standing on the cusp of a medical revolution, here technology, personalised therapies, and better data can transform outcomes for a generation who are more health conscious than any that came before them.
The NHS, and indeed we, must seize this opportunity and look to the future – not restrict ourselves to what has always been done.
In fact, it needs to have, to borrow a phrase, an M&S moment.
This much-loved British brand, a stalwart of our high street for decades, realised change was needed, and embraced modernity.
Pivoting towards the next generation, winning them over, and securing its long-term future.
This is what the NHS needs to do to make sure it’s there for the next 75 years, just as it has been there for us.
And as I’ve seen on visits to hospitals, GPs, dentists, and pharmacies up and down the country, the people working in the NHS have the drive, the dedication, and the determination to build a brighter future, and therefore support a stronger economy for the next generation.
In conclusion, this is because this isn’t just any health service, it’s our National Health Service.
Thank you all very much.