Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Acknowledged
NHS productivity remains below pre-pandemic levels; future targets are significantly ambitious and challenging.
Conclusion
According to official ONS measures, long-term productivity gains in the NHS averaged 0.6% a year over the period 1996–97 to 2018–19. But productivity subsequently fell, both before and during the pandemic, and has yet to recover fully. In March 2024, the government announced that the NHS would receive £3.4 billion of capital investment for digital improvements between 2025–26 and 2027–28. As part of these plans, NHSE committed to achieving ambitious average productivity improvements of 2.0% per year through to 2029–30. NHSE’s modelling for the 2023 NHS Long Term Workforce Plan similarly assumes NHS workforce productivity will improve by 1.5% to 2% per year up to 2036–37, again far higher than the long-term average.23
Government Response Summary
The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic, NHS productivity continues to recover and to support this NHSE are focused on increasing clinical and operational productivity, improving staff retention, technology-enabled transformation, moving care to the right setting and improving prevention and maximizing the value of our spending.
Government Response
Acknowledged
HM Government
Acknowledged
3.2 The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic. The most recent ONS publication of annual Public Sector Productivity shows: • NHS productivity continuing to recover in 2022-23, after the sharp rebound in productivity in 2021-22 following the Covid pandemic and the subsequent increase in demand – overall productivity improved by 1.9% between 2021-22 and 2022-23. • By the end of 2022/23, NHS productivity was 5.4% below the level it was in 2019-20, before the before sustained improvement as measured based on ONS methodology by NHS England over the last two years. • Consistent with the ONS methodology productivity has continued to improve and acute sector productivity is 2.7% higher in the year to December 2024. 3.3 To support improving productivity further NHSE are focused on: • Increasing clinical and operational productivity –training more than 20,000 NHS managers and clinicians, and working with 25 Boards to build capacity and capability for improvement. The Enterprise Resource Planning (ERP) will make more efficient use of diagnostic and surgical capacity. Referrals will be optimised using A&G and clinical triage. • Maximising the value of our workforce – improving retention, reducing sickness-absence and reducing reliance on temporary staffing. The NHS has reduced spending on agency, from £3.5 billion in 2022-23 to a forecasted spend of £2.1 billion in 2024-25. Substantive staff retention has improved, supported by the National Retention Programme. In November 2024, the leaver rate was 6.8%, which is below the Long Term Workforce Plan target range. • Technology-enabled transformation – maximising the use of data and digital to improve the efficiency of services. Deploying Electronic Patient Record (EPR) systems and investment in the NHS App and other patient-facing services to free-up staff time. • Moving care to the right setting and improving prevention – realise savings by treating patients in less resource intensive settings and avoiding expensive hospital admissions. • Maximising the value of our spending – for example in medicines spending, driving uptake of best value biosimilar medicines with an ambition to save £1bn by 2029. 3.4 For 2025-26, every provider has been sent a bespoke pack identifying productivity and efficiency opportunities. The plan for delivering productivity improvements from 2026-27 will be set out following Phase 2 of the Spending Review.