NHS trusts are committed to productivity, but the government needs to step up too

Julian Hartley profile picture

01 July 2024

Julian Hartley
Chief Executive

Double-digit inflation, strikes, demanding efficiency targets and political pressure on the NHS to do more with existing stretched resources.

Just some of the challenges faced by leaders of NHS trusts in recent months while they and their staff work flat out to provide safe, high quality care – the top priority. Trust leaders take seriously their responsibility for providing as much value for taxpayers' money as possible and for ramping up productivity.

Boosting productivity is a high priority for NHS trust leaders but they can't control every factor influencing it. And there isn't a one-size fits all approach or answer given local and regional variables. But, as a new report from NHS Providers shows, trusts are stretching every sinew to boost productivity while providing that number one priority of safe, high-quality care.

NHS productivity has taken a hit since the start of the Covid-19 pandemic. NHS England says that acute sector productivity is 11% down on pre-pandemic levels. NHS England has pledged 1.9% a year productivity growth from 2025/26 to 2029/30, a significant increase compared to historic NHS productivity growth.

NHS trusts are committed to increasing productivity, cutting waste and adding value.

Julian Hartley    Chief Executive

We understand that some NHS trusts are planning sizeable (up to 8%, double usual levels) cost improvement programmes – the level of efficiency savings they need to make in the financial year to meet financial plans. With a reported overall £6bn funding gap between initial drafts and final plans agreed with NHS England, trust leaders are very concerned about mounting financial pressures.

Our report highlights examples of how trusts are making productivity gains in the face of extreme pressure, while focusing on quality and safety, including using digital technology to free more staff from time-consuming admin to look after patients.

NHS trusts are committed to increasing productivity, cutting waste and adding value. The next government must match trusts' efforts to tackle some of the most pressing challenges facing the NHS, injecting much-needed long-term thinking and support.

One place where the NHS needs longer term financial planning is capital investment. High inflation has eroded the value of capital budgets in recent years. Trusts have argued long and loud that current capital budgets are nowhere near enough to tackle the eye-watering £11bn-plus maintenance and repairs backlog while trying to invest in improved facilities and buildings for the benefit of patients and staff and not have to postpone operations and treatment because of safety hazards.

This has a very real impact on trusts' ability to improve productivity. The next government needs to break the short-term cycle of brinkmanship funding and focus on infrastructure, prevention and sustainable long-term financial planning.

While NHS England recently reintroduced some incentives to the financial framework in 2024/25, there are real concerns that the knock-on impacts of a redistribution of capital towards better performing trusts will only entrench financial pressures on trusts already struggling to balance the books.

Those same trusts will find it even harder still to run their services more efficiently as productivity growth depends on key enablers, notably capital investment in infrastructure and digital technologies.

Achieving greater productivity across the NHS needs government support.

Julian Hartley    Chief Executive

A more productive NHS needs more capital investment in hospital, mental health, community and ambulance services to address record-high, multi-billion pound maintenance backlogs across an ageing estate. Capital allocations today aren't enough to foot the bill for essential repairs to buildings and equipment after years of national underinvestment.

The main political parties' manifestos are light on detail about how this estates backlog will be addressed.

Trust leaders think hard about the role of the NHS in the health and wellbeing of our society and economy. Every £1 spent on healthcare nationally returns £4 in increased productivity and employment. And we are calling for the Office for Budget Responsibility's remit to include consideration of health and care impacts and costs.

Achieving greater productivity across the NHS needs government support. Adequate capital investment, funded workforce planning and reform of social care must be priorities for the next government. 

We call on politicians to rally around our 'next generation' NHS, one which helps to drive productivity growth not just in our health services but nationally.

This opinion piece was first published by Public Finance.

About the author

Julian Hartley profile picture

Julian Hartley
Chief Executive

Sir Julian Hartley joined as chief executive in February 2023, having been chief executive of Leeds Teaching Hospitals since 2013, where he led a major programme of culture change and staff engagement to deliver improved quality, operational and financial performance.

Julian’s career in the NHS began as a general management trainee and he worked in a number of posts before progressing to a board director appointment at North Tees and Hartlepool NHS Trust.

In 2019 Julian was asked to be the executive lead for the interim NHS People Plan, having previously worked as managing director of NHS Improving Quality, and in 2022 he was awarded Knight Bachelor for services to healthcare in the Queen’s Birthday Honours. Read more