NHS: will bottomless billions help?

As Rishi Sunak announces a “game-changing” £5.9bn investment into NHS England in a bid to slash waiting times, newly released figures from the OECD make for interesting reading, writes Mattie Brignal.

They show that the UK has fewer doctors and nurses than the average rich country and one of the lowest numbers of hospital beds per capita. Yet UK government healthcare spending per person is above the OECD average, and as a percentage of GDP it is second only to the US, with its eye-wateringly expensive for-profit insurance system.

The data chimes with findings from a pre-pandemic study by the IFS which looked at UK health outcomes in an international context. The study concludes: “The NHS does not have especially good outcomes relative to other wealthy countries. For the most important illnesses in directly causing death, it is a consistently below-average performer.”

International league tables should be treated with caution; the structure – and funding – of health services varies hugely from country to country making meaningful comparisons tricky.

But the figures raise questions about whether the UK is getting value for money on healthcare, and why the NHS appears to be a cash-guzzling black hole.

In terms of both day-to-day spending (doctors, nurses, medicines) and capital investment (scanners, IT systems, clinics) – which is what Sunak’s extra billions are for – more money never seems to be enough.

According to research by the IFS, over the last 40 years, average yearly growth in real terms NHS spending has risen by 4.1 per cent, 1.5 times the planned rate of 2.7 per cent.

Yet analysis by the IPRR, a progressive think tank, shows that since 1975, the UK has spent £100bn less on capital investment in the health system than other comparable advanced economies. This persistent underinvestment has created what the think tank calls a “make do and mend” NHS which has had to cope with old tech and patchy maintenance for decades.

Alongside capital spending, the share of day-to-day spending devoted to the health service has ballooned from 27 per cent at the turn of the millennium to 44 per cent today, once this latest round of investment is taken into account.

Even so, ever since the NHS was given permission to plunder its capital budget to fund spiralling day-to-day running costs, it has felt compelled to do so.

As Richard Murray, chief executive of the King’s Fund think tank, puts it: “The real challenge is as we build these new facilities will we have any staff to put in them, to actually work them?

“It’s increasingly odd that as we look towards the future, this one great big keystone – how we’re going to handle NHS workforces and health and social care staffing – is still the missing piece.”

When it comes to diagnosing NHS inefficiencies, the finger is often pointed at the bloated health bureaucracy. For example, plans announced last month to use part of the hike in national insurance tax to hire 42 new NHS executives with salaries of a quarter of a million pounds appeared symptomatic of a wider problem.

Shifting political priorities have also done the health service no favours, with successive governments yo-yoing over, for instance, whether to set up primary care trusts – wasting billions in the process.

As Matthew Syed of the Sunday Times warns, the near-religious reverence afforded to the NHS has bred a culture where mistakes are not learnt from, and costs – in terms of litigation and repeat visits – continue to be racked up.

Until the NHS opens itself up to healthy debate and welcomes wide-reaching reforms, one-off gifts like Sunak’s will never be enough.