Vital signs improve for English healthcare productivity, think tank says

(Reuters) – Productivity in England’s health service, which fell sharply after the COVID-19 pandemic and is a top priority for the new Labour government, is showing tentative signs of improvement, a think tank report showed on Tuesday.

The Institute for Fiscal Studies said growth in hospital activity had far outstripped increases in staffing over the last year, suggesting new workers were being put to good use – even if this had not yet made a big dent in treatment waiting lists.

Restoring the National Health Service is one of the five missions of Prime Minister Keir Starmer’s Labour government, elected in a landslide in July.

Last month finance minister Rachel Reeves announced sharp increases in tax, spending and borrowing to repair public services, which a vast majority of Britons say are in a poor state.

“While undoubtedly positive news, we should remember that NHS productivity is still below where it was pre-pandemic and will require a further period of improvement before the post-pandemic productivity hit is fully unwound,” Olly Harvey-Rich, research economist at the IFS.

“Nonetheless, this is a welcome development, particularly as the NHS heads into winter.”

The IFS said the number of consultants in NHS England had grown by 3.6% in January to July 2024 compared with a year previously, and there were 6.4% more nurses and health visitors too. But growth in services was much stronger, with elective admissions up by 10.3% and outpatient appointments rising 9.2%.

Overall public sector productivity, dominated by healthcare and education, last year stood around 3% below its level of 1997, according to official data.

Earlier this year, NHS England cited several factors for the drop in productivity, including: strikes, temporary staffing costs, changing needs of patients and past real-terms cuts to healthcare investment that had harmed the resilience of the NHS.