NHS Efficiency

Gillian Keegan Excerpts

Tuesday 2nd November 2021 Westminster Hall

[The Minister for Care and Mental Health (Gillian Keegan)]

It is a pleasure to serve under your chairmanship, Sir Gary.

I welcome the idea and the timeliness of this debate. My hon. Friend the Member for Peterborough (Paul Bristow) has raised an important issue, and I know many hon. Members present have great experience of various parts of the NHS, including my hon. Friends the Members for Watford (Dean Russell), for Bosworth (Dr Evans) and for Central Suffolk and North Ipswich (Dr Poulter). I thank them for their contributions to the debate.

We all have a responsibility to taxpayers to make sure that the NHS uses its resources as effectively as possible. To do that, we need to ensure that productivity grows every year, which is why the NHS long-term plan includes financial test 2:

“The NHS will achieve cash-releasing productivity growth of at least 1.1% per year.”

I make it clear that increasing productivity does not mean making staff work harder or making cuts. It means getting the most out of every £1 the NHS spends, and making sure that as much as possible is spent on frontline care. It means doctors and nurses doing the tasks they are trained to do and that nobody else can do. It means buying the right drugs at the right price. It means more patients getting the right treatment in the right place at the right time. That is good for patients, good for clinicians and good for the taxpayer.

Thanks to the hard work and innovative mindset of many NHS staff, the NHS is regularly recognised as one of the world’s most efficient health systems, although I take the point made by my hon. Friend the Member for Watford that there are different ways of measuring efficiency globally. In fact, in the decade before the pandemic, productivity growth in the NHS was faster than in the wider economy, as was independently verified by the Office for National Statistics.

Furthermore, the UK spends only around 2% of healthcare expenditure on administration—we spend a lot on the NHS, but only 2% of it on administration—and managers make up only 2.6% of the NHS workforce of 1.35 million. They might be an easy target for criticism, but good managers are of course essential to making services work, and many of us will have had experience of that throughout our various careers. If there were no managers, clinicians would have to manage their own workforce, logistics, finances and websites, and spend less time with patients. None the less, we want to improve the quality of management further, which is why we have asked General Sir Gordon Messenger to lead a review of leadership in health and social care.

[Dr Poulter]

I refer to my earlier declaration about my entry in the Register of Members’ Financial Interests, as a practising NHS doctor. On the point that the Minister just made, of course we want to promote clinical leadership in the NHS in senior management positions, because we know that that benefits patients and leads to efficiencies, but we also need to consider the fact that although there are many good NHS managers, a lot of them have never had experience of life outside the NHS. I wonder whether my hon. Friend the Minister could briefly say how we can draw in better business experience and other experience, so that NHS managers have broader experience, and can bring that benefit to the NHS and drive efficiencies.

--- Later in debate ---

[Gillian Keegan]

I have heard exactly the same point being applied to many different industries, even politics—how many people come from business into politics, or go from politics to business? That crossover between the public sector and the private sector, including bringing particular skills and learning from one to the other, is not done nearly enough, which is why I spend a lot of my time trying to get more business people involved in politics. However, I am sure that it is a challenge for people to do that, because I guess that people tend to get stuck in the way that they know and go up the career ladder in the world that they know, so there is too little crossover. I guess that the recruitment companies have something to answer for here. They look for square pegs for square holes—namely, people to do what they have already done, so that there is a natural progression.

Nevertheless, we need to encourage that crossover. If we put out a call to say, “Actually, we really do want businesspeople to join us and help us,” I am sure that many businesspeople would be interested in having a second career in public service, as we ourselves are all doing here in Parliament.

As I was saying, General Sir Gordon Messenger will review leadership; the terms of reference for that review are being developed right now.

There is no doubt that covid has had a severe impact on NHS productivity. Covid significantly increased costs for the NHS, while we also had to stop some regular activity, so productivity was obviously much lower than it would have been otherwise; indeed, many patients did not even wish to attend in-hospital services. Of course, covid made more stringent infection prevention and control measures necessary. Those measures, such has having to put on and take off personal protective equipment, slow staff down and limit the number of patients they can see, and will probably continue to hold down productivity in the immediate future. We know that that has happened, with the existence of green zones and red zones, and other new processes to try and control infection during this period.

We do not yet know what impact covid has had on NHS productivity, but we expect that it will turn out to be large and negative. The ONS estimated that public service productivity as a whole fell by 22.4% between July 2020 and September 2020, compared with the same quarter a year earlier. Even as productivity recovered, it was still 9.8% lower in the first quarter of 2021 compared with Q1 in 2019. Covid has definitely had a massive impact on productivity, and it is reasonable to expect that the impact on NHS productivity will be similar.

At the same time, however, the pandemic has been a spur for innovation. Across the NHS, clinicians said that the pandemic offered an opportunity to cut through bureaucracy and try new ways of working and new ways of partnering with local services. In London, the hospitals worked together and, as my hon. Friend the Member for Peterborough mentioned, their Getting It Right First Time programme will pilot a new approach to high-volume, low-complexity surgery. That is now being rolled out across the NHS. My hon. Friend also mentioned budget numbers, but it is not easy to compare like with like, because that programme has been integrated into the NHS Improvement budget and is now embedded within the plan for elective recovery, so that is where the finances are coming from.

Trusts will be benchmarked against the programme standards for surgical productivity through the model hospital system, and NHS England and NHS Improvement have set up a beneficial changes network to collect evidence of innovation during the pandemic. The network has distilled 3,000 submissions and 700 examples of recognised beneficial changes into 12 high-impact change areas, which will now be rolled out to the NHS. That is something good that has come out of the pandemic through the need to work together to face challenges.

As the NHS begins to recover, increasing productivity is more important than ever. Many patients could not receive the care they needed during the pandemic, and the NHS faces unprecedented waiting lists. We owe an immense debt of gratitude to NHS staff, who have worked so hard to care for patients throughout the pandemic, but the NHS now needs to use the investment that we have provided to deliver more care more effectively and to remove the burden from staff. This year, we are providing £2 billion through the elective recovery fund to increase activity levels, and £700 million through the targeted investment fund to fund improvements in surgical productivity and digital productivity tools. Digital will be a big feature—we have all learned a lot during the pandemic.

We have announced a further £1.5 billion to build surgical hubs across the country in order to develop new models of care and increase productivity, which is being piloted by GIRFT and the London region. Some £2.3 billion has been allocated to transform diagnostics by rolling out at least 100 community diagnostic hubs and investing in digital diagnostics that will deliver 10% higher productivity. Another £2.1 billion has been allocated to digitise frontline services and free staff from admin tasks, so that they can spend more time with patients—something that was mentioned by my hon. Friend the Member for Bosworth.

Our aim is to return productivity to an ambitious trajectory, so that we can deliver on our ambitious plan to build back better and to clear the waiting list, but also to build an NHS that is fit and able to cope with the demands of the future. Of course, we have more work to do on integrating social care and developing best practice so that the systems work well together. It is not over and we have a lot of work to do, but I am sure that with all the measures that we have put in place, my hon. Friend the Member for Peterborough will feel satisfied that the NHS is continuously looking at continuous improvement.