Today, Wednesday 5th March, The Health Foundation have published new research suggesting lower productivity growth would add £13billion to the cost of the NHS.
Ahead of the Government’s Spending Review, due to take place this Spring, The Health Foundation said if productivity only increases in line with the long run average of 1% between 2021/22 to 2028/29, the NHS will need funding of £211billion by 2028/29.
In contrast, the think tank also revealed if the NHS achieves the Government’s target of 2% productivity growth, the NHS budget would need to rise to £198billion by 2028/29.
£183billion has been given to the NHS in 2025/266, but the spending review is due to allocate funding up until 2028/29.
Commenting on the news, Anita Charlesworth, senior economic advisor and co-chair of The Health Foundation’s NHS productivity commission, said: ‘The Government has set a huge task for the NHS to consistently deliver 2% annual productivity growth. Our new analysis underlines how important it is for the NHS to improve productivity and the potential funding shortfall that could emerge if it doesn’t.
‘If the NHS is unable to meet the government’s target, then this could create a significant fiscal headache for government who will be faced with either having to find the money from elsewhere or scale back what the NHS is able to deliver.’
To avoid such a headache, researchers have likewise recommended a new category of prevention spending and urged ministers to set up a review to establish definitions and agree a mechanism to count and track prevention spending across government departments.
Experts have also called for average annual funding growth of 3% to meet the needs of our ageing population and a 10.2% increase in capital spending to compensate for a decade of low investment.
Anita added: ‘Capital spending on new buildings, equipment and technology in the Spending Review will be key to help boost productivity over the long term but reform to create the conditions for boosting productivity is just as vital.
‘Much is now riding on the forthcoming 10-Year Health Plan. The Government’s ambitions to reduce waiting times, boost community-based services, increase the use of digital technology and prevent ill-health are the right ones. But achieving these ambitions will require significant investment in the NHS in the forthcoming Spending Review, accompanied by a restlessness focus on boosting productivity.’
Echoing a similar tone, Matthew Taylor, chief executive of the NHS Confederation claims the latest findings from The Health Foundation have highlighted just how important it is for the NHS to increase productivity.
‘NHS leaders and their teams are committed to achieving this, and have successfully increased acute productivity in the first half of this year,’ Matthew said. ‘Leaders know that in this difficult financial environment they have to get the most from existing capacity or they will not be able to manage the rising demand for care from an aging population, who often have multiple or complex conditions.
‘But we know that the NHS is facing some very complex challenges which are impacting on performance and productivity, including being starved of capital investment. As Lord Darzi highlighted in his report, the lack of vital capital funding to repair crumbling buildings, replace out of date equipment and invest in the latest digital technologies has made it very hard to treat patients safely and efficiently.’
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