Performance Tracker 2022: Summary

Public services are in a fragile state. Some are in crisis. Patients are waiting half a day in A&E, weeks for GP appointments and a year or more for elective treatments. Few crimes result in charges, criminal courts are gummed up, and many prisoners are still stuck in their cells under more restrictive regimes without adequate access to training or education. Pupils have lost months of learning, with little prospect of catching up, social care providers are going out of business or handing back contracts, and neighbourhood amenities have been hollowed out.

These are not isolated problems in individual services, but interconnected structural failures – particularly in the health and care and criminal justice systems. In many cases, there are too few staff, with excessive workloads, working on outdated equipment in run-down buildings.

These problems have been exacerbated by the Covid crisis but are not new. After a decade of spending restraint, public services entered the pandemic with longer waiting times, reduced access, rising public dissatisfaction, missed targets and other signs of diminishing standards. Less obviously, day-to-day spending on services had been shored up by transferring money earmarked for equipment, building maintenance and other capital projects. Governments since 2010 may have been seeking efficiency over resilience but achieved neither. And then Covid hit.

Services were heavily disrupted. Closures and reduced capacity resulted in growing backlogs, and increased pressure on already stretched workforces. Restrictions have now been lifted but things have not returned to the pre-pandemic ‘normal’.

As such, the Truss government faces some very difficult decisions. Its fate at the next election will, in part, depend on how well public services have recovered from the pandemic – on whether crimes are being solved at higher rates, GP appointments can be booked and schools are well staffed. However, even stabilising some public services will cost billions, and tangible improvements will require even more. All this at a time when there are myriad demands for government support due to a once-in-a- generation cost of living crisis and war in Europe. Recent commitments to cut billions in taxes have done little to help the picture.

The Truss government previoulsy promised to stick to the allocations set at the October 2021 spending review, meaning public services would be required to meet the cost of higher inflation and pay settlements from existing budgets. That would necessitate savings elsewhere, with further cuts possible in the upcoming ‘medium-term fiscal plan’.

The analysis in this report outlines the current state of nine public services – general practice, hospitals, adult social care, children’s social care, neighbourhood services, schools, police, criminal courts and prisons – and the comparative, and in many cases interconnected, problems they face, and makes clear the consequences of spending choices the Truss government may take.

Most services do not have sufficient funding to return to pre-pandemic performance levels

The 2021 spending review was generous, relative to those since 2010, with budgets projected to increase by 3.4% per year on average for the nine services we cover. However, as a result of inflation and higher than anticipated pay awards, that has fallen to 1.5%. Even this could understate the costs facing public services as energy prices – which are largely excluded from this inflation calculation – will still affect public service providers even though a relatively small share of budgets is spent on energy.

As a result, the spending review settlement is now unlikely to be sufficient to meet growing demands and deal with the aftermath of Covid in most services. For example, spending per pupil will increase in schools, but will not be sufficient to recover the pandemic-induced lost learning. Likewise, hospital spending may be, just, sufficient to meet new demographic demand but will not allow for a big enough increase in activity to unwind Covid backlogs. In prisons and courts, new demand is set to exceed even generous spending settlements. Similarly, in combination, the spending settlement for local government is no longer sufficient to meet demand in adult social care, children’s social care and neighbourhood services. Only in the police are budget increases enough to return performance to 2019/20 levels (though even then not to levels seen a decade earlier).

There is no meaningful ‘fat’ to trim from public service budgets. If the government wishes to make cuts in the medium-term fiscal plan, it must accept that these are almost certain to have a further negative impact on public services performance.

Backlogs have grown dramatically and will be difficult to tackle

In both hospitals and courts, measured backlogs are at historically high levels. Waiting lists for elective treatments stood at 6.8 million people as of July 2022, the highest on record. In the crown court, the backlog stood at 59,700 cases in June 2022, slightly below the peak of over 60,000 in June 2021 but higher than at any point since at least 2000.

In both services, backlogs were already increasing before the pandemic. Waiting lists for elective surgeries had risen from 563,000 waiting 18 weeks for surgery in March 2019 to 860,000 in March 2020. Meanwhile, the crown court backlog increased from a low of 33,000 in March 2019 to almost 40,000 at the onset of the pandemic.

But even these headline figures, while striking, are likely to underestimate the true scale of the problem. In the case of courts this is because the backlog is disproportionately comprised of jury trials, which take far longer to hear; in the NHS, there may be potentially millions of people who are yet to come forward for treatment – or have failed to secure a timely appointment in the first place. The government has set out plans to tackle backlogs over the spending review period. But in each case it will be difficult to meet given current resourcing plans, even where those plans are relatively unambitious.

Perhaps the biggest problem is that backlogs can’t generally be solved with one-off funding injections. In most cases, there simply aren’t enough staff. Additional judges, doctors, nurses and social workers can’t be magicked out of nowhere. Some staff can be tempted out of retirement or hired from overseas, but stabilising public service workforces requires a long-term strategy to boost recruitment and retain existing staff.

Below-inflation pay offers will exacerbate staffing problems

There are long-standing staff shortages across many public service professions, including nursing, criminal law and teaching. Covid-related absences have contributed to these pressures. In prisons, for example, higher levels of staff sickness have made it harder to fully lift Covid restrictions, with prisoners forced to spend more time in their cells than previously. In the NHS, the overall absence rate was worse in 2021/22 than in the first year of the pandemic. These pressures will not go away and may get worse as we head into winter. Staff absences affect the whole workforce, not just those taken ill, as reduced staffing levels increases the workload on other workers, and may have contributed to staff burn-out in public services.

These workforce problems have been exacerbated by the cost of living crisis. The worsening economic conditions, alongside below-inflation pay settlements, have increased the likelihood of strikes in key public services. In the short term, strikes will disrupt service delivery and efforts to reduce pandemic backlogs. In the long term, government will find it harder to retain well trained staff if pay and conditions in the private sector are seen as relatively more attractive.

Even below-inflation pay offers will stretch budgets. For example, the government’s acceptance of the NHS Pay Review Body’s recommendations will increase the NHS wage bill by approximately £2bn in 2022/23. This increase is unfunded, however, meaning that the NHS will have to find the money from the existing settlement, likely necessitating cuts elsewhere in the service.

Recommendations

Addressing these problems will not be easy and improvements will not happen overnight. There are, however, actions that the government can take now to set public services on the path to long-term sustainability. To that end, we recommend that:

• The prime minister should commit to publishing regular reports on existing and anticipated workforce shortages, with plans for how shortages will be addressed, for all of the services covered in this publication.

• The government should publish updated plans for how each service will tackle backlogs and unmet need, which include key milestones and assessments of the workforce and estate.

• The government should build on the processes used in the 2021 spending review to align spending with priority outcomes, using cross departmental outcomes to foster greater collaboration between departments and ensure that spending decisions are not siloed.

• The government should improve the range and quality of the data it collects on public services, with particular focus given to adult social care data.