Working to make government more effective

Working to make government more effective

Report chapter

Performance Tracker 2022: Methodology

Background information on our research for each spending area

Performance Tracker

Public services spending, including estimates of the total spend on public services, and Figures 0.2 and 0.3

To estimate the real cost of public spending, we deflate government spending figures using the GDP deflators published in the March 2022 Spring Statement, available at www.gov.uk/government/statistics/gdp-deflators-at-market-prices-and-money-gdp-march-2022-spring-statement. To better reflect the underlying inflation conditions present in 2020/21, we estimate our own figures by generating a mid-point that averages across values from 2019/20 and 2021/22. We deflate spending figures in our financial analysis across all Performance Tracker chapters.

For estimates of historic public spend, we use data from 2009/10 where available, otherwise we draw figures from 2010/11. We draw data from the sources listed in Table 10.1.

Table 10.1 Data sources for each spending area

Spending area

Data source

General practice

 NHS England, Investment in General Practice in England, 2016/17 to 2020/21, 12 May 2022, retrieved 7 October 2022, www.england.nhs.uk/publication/investment-in-general-practice-in-england-2016-17-to-2020-21

Hospitals

 Department of Health and Social Care, Annual Report and Accounts: 2020-2021, The Stationery Office, January 2022, HC 1053 – https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1052421/dhsc-annual-report-and-accounts-2020-2021-web-accessible..pdf
Adult social care

NHS Digital, Adult Social Care Activity and Finance Report, England - 2020-21, 2021, ‘Appendix B: Expenditure on adult social care, 2009-10 to 2020-21’, retrieved 7 October 2022, https://digital.nhs.uk/data-and-information/publications/statistical/adult-social-care-activity-and-finance-report/2020-21/appendix-b
Children’s social care

Department for Education, ‘S251 Outturn – Children and Young People’s Services (National, Regional, LA levels)’, retrieved 7 October 2022, https://explore-education-statistics.service.gov.uk/data-catalogue/la-and-school-expenditure/2020-21; DLUHC, ‘Local authority revenue expenditure and financing England: 2020 to 2021 individual local authority data – outturn’, 2021, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn; DLUHC, ‘Revenue outturn cultural, environmental, regulatory and planning services (RO5) 2020 to 2021’, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn; DLUHC, ‘Revenue outturn highways and transport services (RO2) 2020 to 2021’, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn
Neighbourhood services DLUHC, ‘Revenue outturn highways and transport services (RO2) 2020 to 2021’, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn; DLUHC, ‘Revenue outturn cultural, environmental, regulatory and planning services (RO5) 2020 to 2021’, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn
Schools Department for Education, ‘School funding statistics’, table 1, retrieved 7 October 2022, https://explore-education-statistics.service.gov.uk/find-statistics/school-funding-statistics/2021-22
Police DLUHC, ‘Revenue outturn central, protective and other services (RO6) 2020 to 2021’, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn; StatsWales, ‘Revenue outturn expenditure summary, by service’, retrieved 7 October 2022, https://statswales.gov.wales/Catalogue/Local-Government/Finance/Revenue/Outturn/revenueoutturnexpendituresummary-by-service
Courts HMCTS, ‘Annual report and accounts 2021-22’, retrieved 7 October 2022, www.gov.uk/government/collections/hmcts-annual-reports-and-plans
Prisons HMPPS, ‘HMPPS annual report and accounts 2020-2021’, retrieved 7 October 2022, www.gov.uk/government/publications/hmpps-annual-report-and-accounts-2020-21

At the time of publication, figures for 2021/22 are not publicly available for all public services. Where this occurs we generate estimates in the following way:

  • A similar approach is used for the estimates of children’s social care, adult social care and neighbourhood services. The data sources and approach are discussed in greater detail in the rest of this chapter.
  • Prison spending figures for 2021/22 are imputed by assuming that spending on prisons changes in line with the HM Prison and Probation Service (HMPPS) programme budget (Resource DEL, minus administration costs) reported in the 2020/21 annual accounts and HM Treasury’s 2021/22 supplementary estimates. See: Ministry of Justice, Annual Report and Accounts 2020-21 (HC 788), The Stationery Office, December 2021, p. 217; and HM Treasury, Central Government Supply Estimates 2021-22: Supplementary estimates (HC 1152), The Stationery Office, February 2022, p. 151.
  • A similar approach is followed for general practice. The figure for 2020/21 spending comes from NHS England, Investment in General Practice in England, 2016/17 to 2020/21, 12 May 2022, retrieved 7 October 2022, www.england.nhs.uk/publication/investment-in-general-practice-in-england-2016-17-to-2020-21. This figure includes Covid spending. The figure for 2021/22 is calculated by applying the uplift from the combined increase in the budget for ‘NHS commissioning boards’, ‘NHS Provider’ and ‘NHS Commissioning Board (known as NHS England) net expenditure financed from National Insurance contributions’ in the “Supplementary estimates” (see hospitals section above) to the 2020/21 Investment in General Practice figure.

Change in demand for public services since 2019/20, actual and projected (Figure 0.4)

For police and neighbourhood services, our assumption is that underlying demand will rise in line with England’s population growth. The methodology below describes how we project underlying demand for general practice, hospitals, adult social care, children’s social care, schools, criminal courts and prisons, and how we calculate backlogs in criminal courts.

General practice

To project likely growth in demand for general practice, we use analysis from the Health Foundation. Its main published analysis for ongoing demand, published in October 2021, 151 Rocks A, Boccarini G, Charlesworth A and others, REAL Centre Projections: Health and social care funding projections 2021, The Health Foundation, 2021, www.health.org.uk/sites/default/files/upload/publications/2021/REALCentreFundingProjections_WEB.pdf includes an estimate for how much primary care activity will need to increase to maintain standards, factoring in growing case complexity due to co-morbidities. General practice excludes some services that are included in the Health Foundation’s measure of primary care but includes others (such as drugs dispensed in general practice) that it excludes. But we nonetheless assume that demand for general practice services changes in the same way as demand for primary care.

To ensure comparability with the demand projections shown for other services (for which we do not include service-specific cost pressures or possible productivity gains), we only factor in increases in activity, rather than additional assumptions around changes to pay and productivity.

Hospitals

To project likely growth in demand in hospitals, we again draw on analysis from the Health Foundation. Its analysis provides an estimate of the rate of growth in activity, adjusted for morbidity, needed to meet growing demand for acute care, while maintaining its scope and quality. We assume that demand for acute and specialist trusts (our focus in this chapter) changes in the same way as the Health Foundation’s projection of demand for acute care.

To ensure comparability with the demand projections we show for other services – where we do not include service-specific cost pressures or possible productivity gains – we only factor in increases in activity.

The Health Foundation kindly provided us with a breakdown of its model to allow us to derive an overall estimate of acute care, based on a weighted average of elective, non- elective, A&E and outpatient activities.

Adult social care

For adult social care, we take the projected increase in demand from the Health Foundation’s REAL Centre, published in October 2021. 152 Ibid. This model incorporates several factors, including increases in pay and projected changes in productivity. We take only the increase in activity projected in the model, as the outlook for pay has changed since it was published.

In other services, we only factor in increases in demand, without incorporating above- inflation cost pressures. This is because, for most services, we expect wages to broadly increase in line with economy-wide inflation (the GDP deflator, which will increase less quickly than consumer price inflation), which our spending projections already account for. But this is not the case for adult social care where a substantial proportion of the workforce is paid the National Living Wage (NLW), which is set to increase much more quickly than economy-wide inflation.

The latest projections for the NLW were published in March 2022. 153 Sanderson B, ‘Consultation on April 2023 National Minimum Wages rates deadline for submission: 20 June 2022’, 2022, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/1063857/Low_Pay_Commission_consultation_letter.pdf But since then, expectations over increases in nominal wages have increased. As the target is for the NLW to equal two thirds of median wages by 2025, this also increases the projected path of the NLW. As a result, we scale up the March estimates in line with the change in the Bank of England’s forecast for average weekly earnings between its February 2022 154 Bank of England, Monetary Policy Report, 2022, retrieved 7 October 2022, p. 17, www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2022/february/monetary-policy-report-february-2022.pdf?la=en&hash=BD71A8D49FA5973A33… and August 2022 155 Bank of England, Monetary Policy Report, Bank of England, 2022, p. 29, www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2022/august/monetary-policy-report-august-2022.pdf forecasts. To calculate the impact of a higher NLW on adult social care local authority budgets, we use the Institute for Fiscal Studies’ assumption that every 1% increase in the NLW costs £50m. 156 Ogden K, Phillips D and Sion C, ‘What’s happened and what’s next for councils?’, Institute for Fiscal Studies, 2021, retrieved 7 October 2022, https://ifs.org.uk/books/whats-happened-and-whats-next-councils In total, we calculate that above-inflation increases in the NLW will cost local authorities an additional £650m in 2024/25 over 2021/22. To ensure consistency with other services, we do not incorporate these cost pressures into Figure 0.4 (which looks only at projected increases in demand), but we do include them in Figure 0.5 (which compares the generosity of the spending review settlement to increases in ongoing demand).

Children’s social care

To project demand for children’s social care, we break down children’s social care spending into three service categories based on the data returns that local authorities make to the DfE under Section 251 of the Apprenticeships, Skills, Children and Learning Act 2009. For each category, we make the assumptions about rates of growth set out in Table 10.2.

Table 10.2 Projected growth rates for children's social care

Service category

Gross spending 2019/20 (£bn)

Growth rate assumption

Projected growth 2019/20 to 2024/25
Foster placements £1.8bn Increases in line with the growth in the rate of foster placements per child between 2007/08 and 2019/20 9.7%
Residential care £1.6bn Increases in line with the growth in the rate of residential care placements for children in England between 2007/08 and 2019/20 6.7%
Other expenditure £5.8bn Increases in line with the rate of episodes of need per child in England between 2012/13 and 2019/20 8.6%

As 2020/21 was an unusual year due to the pandemic, we project demand from 2019/20 onwards. In common with the assumptions made for other service areas, to project demand growth we assume that the service remains as efficient as it was in 2019/20 and that the cost of providing each service grows in line with economy-

wide inflation. If there are cost pressures beyond the projected increases in demand described above, then spending would have to rise faster.

Schools

To project how much schools would have to spend to meet increased demand, we separate primary and secondary schools because:

  • on average, the government spends slightly more on each secondary school pupil than on each primary school pupil
  • the DfE projects that the number of primary school pupils will fall over the period 2019/20–2024/25 while the number of secondary school pupils will increase.

As 2020/21 was an unusual year, we base our projections on spending in 2019/20 (see Table 10.3). We multiply the 2019/20 level of spending per pupil in primary and secondary schools by expected growth in pupil numbers between 2019/20 and 2024/25 and add together the implied figures for spending on primary and secondary schools. We assume that the costs of the inputs used in providing school services rise in line with economy-wide inflation.

Table 10.3 Projected growth rates for schools

Service category Gross spending 2019/20 (£bn) Growth rate assumption Projected growth 2019/20 to 2024/25
Primary schools £19.8bn The number of pupils grows in line with DfE projections for the number of primary school children -6.3%
Secondary schools £18.5bn

The number of pupils grows in line with DfE projections for the number of secondary school children

 7.5%

Criminal courts

We project demand for the crown and magistrates’ courts separately.

For the crown court, we calculate demand as the number of cases received each year, weighted by the average hearing time for cases completed in each year. We do this separately for cases that are ‘for trial’ and other cases (such as appeals and sentencing). We assume that: (i) longer hearing times are a result of cases being more complex, rather than the court operating inefficiently; and (ii) the cases received would have had similar hearing times to the ones disposed of, within case type (cases for trial and others), in the year in question.

For magistrates’ courts, where the data we have is less detailed, we measure demand simply as the number of cases received each year.

We weight magistrates’ and crown court demand to come to an overall measure of court demand. We do this using two components. First, we use the number of sitting days in the crown court and magistrates’ courts in 2018. 157 Maynard P, Response to parliamentary question, Parliament.uk, 10 June 2019, retrieved 8 October 2019, www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2019-06-03/259164 Second, we use the average costs per sitting day in the crown court and magistrates’ courts, which the National Audit Office reported in 2016, as these are the latest available figures. 158 Comptroller and Auditor General, Efficiency in the Criminal Justice System, Session 2015–16, HC 852, National Audit Office, 2016, p. 10, www.nao.org.uk/wp-content/uploads/2016/03/Efficiency-in-the-criminal-justice-system.pdf This implies that 61% of court demand comes from the crown court and around 39% comes from the magistrates’ courts. We then project demand forward separately for the crown and magistrates’ courts.

The main driver of our projection of court demand is the increase in police officers, with the government planning to increase officer numbers by 20,000 on top of 2018/19 figures by April 2023. 159 Home Office, ‘Police officer uplift, quarterly update to June 2022’, 27 July 2022, retrieved 10 October 2022, www.gov.uk/government/statistics/police-officer-uplift-quarterly-update-to-june-2022/police-officer-uplift-quarterly-update-to-june-2022 We assume that an increase in the number of officers means the police can charge more cases, because as it stands the number of charges is only a small fraction of total crimes reported. The number of charges per police officer has fallen steadily for several years, in part due to underfunding elsewhere in the criminal justice system. We assume that the number of charges per officer will return to and stay at 2019/20 levels, though this is uncertain. For simplicity, we assume that the additional officers are present throughout the year, and so they have a constant impact on charging from April to March.

In the magistrates’ courts, we assume that the least serious ‘summary’ cases are unaffected by the number of police officer charges as some of these are brought by non-police organisations and they are simple, routine offences. All other cases, in both the crown and magistrates’ courts, increase in line with police charges.

Prisons

To project demand for prisons, we use the Ministry of Justice’s (MoJ) central estimate for prisoner numbers over the five years from 2021 to 2026, which was published in November 2021. 160 Ministry of Justice, ‘Prison population projections 2021 to 2026, England and Wales’, 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1035682/Prison_ Population_Projections_2021_to_2026.pdf

The MoJ’s central estimate is that the prisoner population will rise by 15.7% between 2019/20 and 2024/25 (and by 23% between 2020/21 and 2024/25). This projection incorporates the recruitment of the additional 20,000 police officers and the estimated impact of other policies, including: the provisions for increasing the release point for violent and sexual offenders sentenced to a standard determinate sentence of four to seven years; the Statutory Instrument to increase custodial sentences for serious offenders with a custodial sentence of seven years or more; the Serious Crime Act 2015; the Offensive Weapons Act 2019; and the Domestic Abuse Bill 2020.

The projections are contingent on assumptions about the number of cases processed in the courts and do not factor in the impact of the barristers’ strike. At the time of writing, actual prisoner numbers were lower than the November 2021 projections implied.

Cost of 2022/23 public sector pay awards (Table 2)

To calculate the cost of public sector pay increases, we multiply staff costs by the average increases in pay awarded for 2022/23, most of which were published in summer 2022 but backdated to April. We take the share of spending on staff in 2019/20 to ensure that temporary pandemic effects do not skew our findings .

For each of our nine services, we calculate the cost of 2022/23 public sector pay awards relative to a 2.5% increase, because in spending review 2021 the assumption was a 2–3% increase. We also calculate the additional cost of increasing pay in line with private sector wages (5.25% in the Bank of England’s August 2022 forecast). 161 Bank of England, Monetary Policy Report, Bank of England, 2022, retrieved 7 October 2022, p. 28, www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2022/february/monetary-policy-report-february-2022.pdf?la=en&hash=BD71A8D49FA5973A33…

This is an underestimate of the total cost of increased wages in public services, because wage costs in the private sector will indirectly increase public service costs. One example is adult social care, where the public sector procures many services from the private sector and only provides a minority of social care directly.

Hospitals

We calculate the effect of the pay award on hospital spending as the average of costs in relation to doctors and other staff (4.5% and 4.75% respectively). 162 Department of Health and Social Care, ‘NHS staff to receive pay rise’, press release, 19 July 2022, retrieved 7 October 2022, www.gov.uk/government/news/nhs-staff-to-receive-pay-rise

Staff costs are taken from the DHSC annual report and accounts, showing that 64% of hospital spending is staff costs. 163 Department of Health and Social Care, Annual Report and Accounts 2020-21, 2022, retrieved 7 October 2022, www.gov.uk/government/publications/dhsc-annual-report-and-accounts-2020-to-2021

GPs

Only salaried GPs and other GP staff are covered by pay review body recommendations (where awards are the same as for hospital doctors). Partner GPs are not paid a direct salary, but rather take their income as the overall profit from the practice.

We calculate the share of total GP spending on salaries covered by pay review bodies using data on the number of salaried GPs, partner GPs and other staff from NHS Digital, 164 NHS Digital, ‘General Practice Workforce’, series/collection, retrieved 7 October 2022, https://digital.nhs.uk/data-and-information/publications/statistical/general-and-personal-medical-services data on the salaries of salaried GPs and the incomes of partners from another NHS Digital dataset 165 NHS Digital, ‘GP Earnings and Expenses Estimates’, series/collection, retrieved 7 October 2022, https://digital. nhs.uk/data-and-information/publications/statistical/gp-earnings-and-expenses-estimates and an assumption from the Health Foundation’s REAL Centre that 73% of total costs in primary care are staff costs. 166 Rocks A, Boccarini G, Charlesworth A and others, REAL Centre Projections: Health and social care funding projections 2021, The Health Foundation, 2021, retrieved 7 October 2022, www.health.org.uk/publications/health-and-social-care-funding-projections-2021

We assume that the average salary for a non-GP employee in a practice is £30,000 a year, close to the UK full-time average salary. Based on the reported numbers of salaried and partner GPs and other staff and reported spending, we calculate that the income of partners accounts for 38.5% of staff costs in GP practices. This implies that 45% of total spending on GPs (61.5% of the 73% of total spending accounted for by pay costs) is covered by pay review bodies.

Adult social care

We take reported spending on staff costs for adult social care from local authority returns. 167 Department for Levelling Up, Housing and Communities, ‘Revenue outturn social care and public health services (RO3) 2020 to 2021’, 12 October 2021, retrieved 5 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn This only accounts for direct spending on staff, and implies that only 15% of adult social care spending is direct spending on staff covered by the National Joint Council for Local Government Services (the equivalent of a pay review body in that sector). The award this year was a flat £1,925 increase for every worker, which equates to around a 5% pay bill increase. 168 Unite, ‘Unions react to pay offer for council and school staff’, 25 July 2022, retrieved 7 October 2022, www.unitetheunion.org/news-events/news/2022/july/unions-react-to-pay-offer-for-council-and-school-staff

Children’s social care

We take reported spending on staff costs for children’s social care from local authority returns. 169 Department for Levelling Up, Housing and Communities, ‘Revenue outturn social care and public health services (RO3) 2020 to 2021’, 12 October 2021, retrieved 5 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn This only accounts for direct spending on staff, and implies that only 34% of children’s social care spending is direct spending on staff covered by the National Joint Council for Local Government Services. The award this year was a flat £1,925 increase for every worker, which equates to around a 5% pay bill increase. 170 Unite, ‘Unions react to pay offer for council and school staff’, 25 July 2022, retrieved 7 October 2022, www.unitetheunion.org/news-events/news/2022/july/unions-react-to-pay-offer-for-council-and-school-staff

Neighbourhood services

We take reported spending on staff costs for neighbourhood services from local authority returns. 171 Department for Levelling Up, Housing and Communities, ‘Revenue outturn highways and transport services (RO2) 2020 to 2021’, 12 October 2021, retrieved 5 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn   172 Department for Levelling Up, Housing and Communities, ‘Revenue outturn cultural, regulatory and planning services (RO5) 2020 to 2021’, 12 October 2021, retrieved 5 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn This only accounts for direct spending on staff, and implies that only 19% of neighbourhood services spending is direct spending on staff covered by the National Joint Council for Local Government Services. The award this year was a flat £1,925 increase for every worker, which equates to around a 5% pay bill increase. 173 Unite, ‘Unions react to pay offer for council and school staff’, 25 July 2022, retrieved 7 October 2022, www.unitetheunion.org/news-events/news/2022/july/unions-react-to-pay-offer-for-council-and-school-staff

Schools

Unlike other services, schools’ pay awards cover school years (September to August) rather than financial years. For fair comparison, we look at the cost increase for the full 2022–23 school year.

On average, the award for 2022–23 equates to a 5.4% increase in school pay bills. 174 Sibieta L, School Spending and Costs: The coming crunch, Institute for Fiscal Studies, 2022, retrieved 7 October 2022, https://ifs.org.uk/publications/school-spending-and-costs-coming-crunch We take spending on staff from the DfE’s technical note on the composition of school costs, which shows that 80% of schools’ spending is on staff. 175 Department for Education, Schools’ Costs: 2020 to 2021, 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/961096/Schools_costs_technical_note_January_2021.pdf

Police

The police pay award amounts to a 5% increase in pay bills on average. 176 Police Remuneration Review Body, Police Remuneration Review Body: Eighth report: England and Wales 2022, 2022, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/1092296/PRRB_2022_report_for_publication.pdf Spending on staff accounts for 78% of police spending, based on DLUHC, ‘Local authority revenue expenditure and financing England: 2020 to 2021 individual local authority data – outturn’ 177 Department for Levelling Up, Housing and Communities, ‘Local authority revenue expenditure and financing England: 2020 to 2021 individual local authority data – outturn’, 2021, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn and StatsWales, ‘Revenue outturn expenditure summary, by service’ figures for Wales. 178 StatsWales, ‘Revenue outturn expenditure summary, by service’, Welsh Government, 2021, retrieved 7 October 2022, https://statswales.gov.wales/Catalogue/Local-Government/Finance/Revenue/Outturn/revenueoutturnexpendituresummary-by-service

Criminal courts

Pay awards in the courts system cover two different types of employee. Court staff account for 28% of total HM Courts and Tribunals Service (HMCTS) spending, 179 HM Courts and Tribunals Service, HM Courts and Tribunals Service: Annual report and accounts: 2019-20, 2020, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/902301/HMCTS_Annual_Report_and_Accounts_2019-20_WEB.P… and are covered by a three-year pay deal that predates the Covid crisis and gives a 2.8% award for 2022/23. 180 Smith B, ‘MoJ offers 9.9% three-year pay deal in return for overtime cuts and standard hours’, Civil Service World, 12 August 2021, retrieved 7 October 2022, www.civilserviceworld.com/news/article/moj-offers-three-year-pay-deal-in-return-for-overtime-cuts-and-standard-hours Expenditure on judges accounts for 29% of HMCTS expenditure, 181 HM Courts and Tribunals Service, HM Courts and Tribunals Service: Annual report and accounts: 2019-20, 2020, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/902301/HMCTS_Annual_Report_and_Accounts_2019-20_WEB.P… with a judge pay award of 3% in 2022/23. 182 Raab D, Statement, UK Parliament, 19 July 2022, retrieved 7 October 2022, https://questions-statements.parliament.uk/written-statements/detail/2022-07-19/hcws234

Prisons

The Prison Service Pay Review Body estimated that its recommendations, which included basic pay increases and higher allowances, would lead to an 8.5% increase in prison pay bills. 183 Prison Service Pay Review Body, Prison Service Pay Review Body: Twenty first report on England and Wales 2022, 2022, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/ file/1092253/PSPRB_2022_E_W_report.pdf Spending on staff accounts for 41% of total spending on prisons. 184 Ministry of Justice, ‘Costs per place and costs per prisoner 2019-20 supplementary information’, 2020, retrieved 7 October 2022, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/929421/costs-prison-place-prisoner-2019-20-supplement…

Difference between the average annual real-terms increase in services’ budgets and the projected increase in demand between 2021/22 and 2024/25 under different inflation scenarios (Figure 0.5)

For the nine services we cover in this report, we project how much money the public sector would have to spend to meet demand. To estimate the cost of doing this, we project growth in underlying demand for each service as described above.

For each service we also project how spending is likely to evolve over the course of the spending review (up to 2024/25). The 2021 spending review did not provide budgets for particular public services, only government departments (with the exception of schools and the NHS, which have their own budget lines).

For each service, we take the most relevant department’s settlement, implicitly assuming that all spending within those budgets will increase at the same rate.

This means that we assume that spending on GPs and hospitals will increase in line with NHS spending, spending on courts and prisons will increase in line with MoJ spending, spending on the police will increase in line with Home Office spending, and schools’ spending will increase in line with the specific school funding line in the spending review. For the three local government services (adult social care, children’s social care and neighbourhood services), we take the government’s projections for local authority spending power, which incorporate changes to grants and assumed increases in local taxes (council tax and business rates).

To compare the generosity of the cash-terms settlements set out in the 2021 spending review over time, we deflate these numbers using three iterations of the GDP deflator, a measure of economy-wide inflation that is widely used – including by the government – to assess the real-terms generosity of public service spending plans. We take the GDP deflator from the October 2021 spending review itself and then the GDP deflator at the Spring Statement in March 2022, both from the Office for Budget Responsibility (OBR). More recent projections are more difficult to come by because the GDP deflator is not something that most forecasters project. But the June 2022 World Economic Outlook from the Organisation for Economic Co-operation and Development (OECD) does include a projection that factors in more recent inflation expectations and so we take its projections for 2022 and 2023 from there and assume 2024 increases are the same as in the 2022 Spring Statement.

To capture demands on local authorities as a whole, we combine the increases in demand for neighbourhood services, children’s social care and adult social care, weighting the projected increases by the 2021/22 spending on each service.

Average change in justice sector waiting times since 2019/20 (Figure 0.6)

'Offence to charge’, ‘Charge to first listing’, and ‘First listing to completion dates’ waiting times (in days) are taken from MoJ, ‘Criminal court statistics quarterly: April to June 2022’, table T4, columns F, H and T, retrieved 7 October 2022, www.gov.uk/government/statistics/criminal-court-statistics-quarterly-april-to-june-2022.

Percentage change in backlogs in elective care and the crown courts (Figure 0.7)

For the percentage change in backlogs in elective care and the crown courts we looked at, respectively: NHS England, ‘Consultant-led Referral to Treatment Waiting Times Data 2021-22’, RTT Overview Time series, March 2022, retrieved 7 October 2022, www.england.nhs.uk/statistics/statistical-work-areas/rtt-waiting-times/rtt-data-2021-22; and HMCTS, ‘Criminal court statistics quarterly, January to March 2022’, retrieved 7 October 2022, www.gov.uk/government/statistics/criminal-court- statistics-quarterly-january-to-march-2022, Table C1.

The hospitals and courts data is recorded over different time periods, with hospitals data recorded on a monthly basis at the start of the month and criminal courts data recorded on a quarterly basis on the last day of the reporting quarter. To ensure greater consistency across data series, we have selected the closest hospital date to the respective reporting quarter, that is, data from 1 April 2022 for hospitals is reported alongside Q4 2021/22 courts data.

Forecast impact of police uplift on total charges (Figure 0.9)

The charge rate per officer is generated using officer numbers data available from Home Office, ‘Police workforce England and Wales statistics’, retrieved 7 October 2022, www.gov.uk/government/collections/police-workforce-england-and-wales and charge/summonsed data is from Home Office, ‘Crime outcomes in England and Wales 2021 to 2022’, retrieved 7 October 2022, www.gov.uk/government/statistics/crime-outcomes-in-england-and-wales-2021-to-2022/crime-outcomes-in-england-and-wales-2021-to-2022#further-information.

The 2019/20 charge rate per officer is used to generate forecast charged/summons by multiplying against the March 2023 total police officer recruitment target. The target was taken from Home Office, ‘Police officer uplift, quarterly update to June 2022’, retrieved 7 October 2022, www.gov.uk/government/statistics/police-officer-uplift-quarterly-update-to- june-2022/police-officer-uplift-quarterly-update-to-june-2022.

The recruitment target has changed since the initial announcement following revisions to the October 2019 baseline – discussed in further detail at Home Office, ‘Police officer uplift, quarterly update to June 2022’, retrieved 7 October 2022, www.gov.uk/government/statistics/police-officer-uplift-quarterly-update-to-june-2022/police-officer-uplift-quarterly-update-to-june-2022. Figures for 2023/24 and 2024/25 have duplicated this figure on the basis that there is no current evidence of any additional uplift in police officers after this period, and there is no evidence to suggest a clear alternative trend to the charge rate. This is therefore an inexact forecast for total charges.

1. General practice

Appointments in general practice (Figure 1.4)

The NHS changed how it collects information on the number and type of appointments in primary care in October 2018. There is an overall time series going back to November 2017, but granular daily counts of appointments are only available from December 2018. There is, however, a consistent time series of the number of referrals that GPs have made that is available back to 2008.

Referrals (Figures 1.6 and 1.7)

Spending on GP services comes from the ‘Investment in General Practice in England, 2016/17 to 2020/21’ dataset. 185 NHS England, Investment in General Practice in England, 2016/17 to 2020/21, 2022, retrieved 7 October 2022, www.england.nhs.uk/publication/investment-in-general-practice-in-england-2016-17-to-2020-21 For 2020/21, this dataset splits out the amount that the NHS provided GPs for spending on Covid-related activity. This information allows us to plot a separate data point for Covid spending in 2020/21.

We start the referral rate time series from the point when there is consistent appointments data, as specified above. For the referral rate, we calculate the proportion of attended appointments that GPs conducted that resulted in a specific and acute GP referral. To calculate the number of attended GP appointments, we take the total number of attended appointments across all of general practice in a given month (as outlined in the ‘Appointments in General Practice’ dataset) and multiply that by the percentage of appointments that GPs carried out (using the SDS Role Group categorisation, rather than HCP categorisation). This step requires us to assume that the attendance rate of GP appointments is the same as the attendance rate of all primary care appointments, an assumption that is unlikely to be met in any month but which will be close enough to make this analysis meaningful. For the monthly number of referrals, we use the ‘GP Referrals Made (Specific Acute)’ data from the Monthly Referral Return dataset. 186 NHS England, ‘Monthly Outpatient Referrals Data’, retrieved 7 October 2022, www.england.nhs.uk/statistics/statistical-work-areas/outpatient-referrals/mrr-data

Number of direct patient care staff employed in primary care (Figure 1.9)

For the projected number of direct patient care (DPC) staff, we calculate the number of DPC staff that the NHS has added to the service per quarter since March 2019. We then extrapolate that forward, to come to a total number of DPC employees if recruitment continues at its current pace.

Size of job groups within the primary care workforce (FTE) (Figure 1.10)

The number of GPs used in this chart is the ‘All regular GPs (excludes locums)’ line from the GP Workforce bulletin tables. This is a combination of ‘All qualified permanent GPs’ and ‘GPs in training grades’ from the same dataset.

Percentage change in the number of patients registered with GP practices and the number of GPs, since September 2015 (Figure 1.11)

As with Figure 1.10, the change in the number of GPs refers to the percentage change in the number of ‘All regular GPs (excludes locums)’. The change in the number of patients comes from the ‘Total number of patients’ line in Table 5 of the GP Workforce bulletin tables. The starting date for both of these time series is September 2015 because this is when the time series starts in that dataset.

2. Hospitals

Beds per head (Figure 2.6)

For this chart, we take the total number of general and acute overnight beds from NHS England’s ‘Bed availability and occupancy’ dataset and divide this number by the number of people in England in the relevant year from the Office for National Statistics (ONS) ‘Mid-year population estimate’ dataset.

Staffing (Figure 2.7)

Nursing numbers include adult and children’s nurses who work in hospitals, but do not include community nurses from the ‘NHS workforce statistics’ dataset.

Doctor numbers are taken from the ‘NHS workforce statistics, doctors by grade and speciality’ dataset. The total number of doctors includes consultants, associate specialists, specialty doctors, staff grade doctors, specialty registrars, F1 and F2 doctors and hospital practitioners/clinical assistants.

Voluntary resignations (Figure 2.9)

For this chart, we group some of the voluntary resignation categories from the ‘NHS workforce, reasons for leaving’ dataset to make the chart easier to read. The groupings are as follows:

  • Work–life balance: this includes just the ‘work–life balance’ category from the original dataset, as this is the category that we want to highlight.
  • Working conditions: this includes the ‘better reward package’ and ‘incompatible working relationships’ categories.
  • Career development: this includes the ‘lack of opportunities’, ‘promotion’ and ‘to undertake further education and training’ categories.
  • Family/external: this includes the ‘adult dependants’, ‘child dependant’, ‘health’ and ‘relocation’ categories.
  • Other/not known: this includes only the ‘other/not known’ category.

Staff absences (Figure 2.10)

NHS England has 25 categories for staff absences, but no specific number for absences due to Covid. We produced an upper-bound estimate for this number by combining the total number of absences listed under S13 Cold cough flu – influenza, S15 Chest & respiratory problems and S27 Infectious diseases. But in practice this will have caught a proportion of non-Covid absences. Our upper-bound estimate of mental health absences uses the numbers reported under S10 Anxiety/stress/depression/other psychiatric illnesses. We cannot preclude the possibility that some staff absences for either Covid or mental health were reported under S98 Other known causes – not elsewhere classified, or S99 Unknown causes/not specified, but for the sake of simplicity we disregarded this.

In all cases we calculate the number of full-time equivalent (FTE) days lost to sickness in a given month for each category as a share of the total FTE days available, and present this percentage as the sickness absence rate.

3. Adult social care

Covid-related spending on adult social care in 2020/21 and 2021/22 (Figure 3.1)

This information comes from the ‘Covid-19 financial impact monitoring information’ dataset, released in 20 rounds by DLUHC. Quarterly totals are calculated by summing monthly totals where this is relevant. Spending details for some months are not available in the dataset and in these instances we impute those monthly amounts through comparisons between year-to-date (YTD) amounts in different releases. For example, Round 17 does not include a monthly amount for October 2021, and only shows the financial YTD total for April to October 2021. But Round 16 includes YTD data to the end of August 2021 and forecasts spend for September 2021. Combining the August YTD actuals with the September forecast means that we could create a YTD September total, which, when subtracted from the YTD October actuals, would give an estimate for the spending in October 2021. This means that the monthly totals are likely to not be completely accurate, as September actuals might have differed from the September forecast. But they are close enough for the imputation to be useful.

It should be noted that it was impossible to impute separate totals for July and August 2021 and November and December 2021 because the survey data was released too infrequently for this to be possible. Instead, we calculate a total for the two months. This should not be a problem as, in both cases, the months fall in the same quarter (Q2 2021/22 and Q3 2021/22 respectively) and therefore are shown in aggregate on the chart.

Change in spending on adult social care in England since 2009/10 (real terms) (Figure 3.2)

The data point for 2020/21 is the actual spend on adult social care, as outlined in Table 5 of Appendix B of the ‘Adult social care activity and finance report, England– 2020-21’ (ASCAFR) dataset. We use this time series rather than the spend on adult social care as outlined in the local authority revenue outturn dataset because it captures a wider range of spending on the service than just local authority related spending. To calculate the forecast spend in 2021/22, we calculate the change

in spending between the amount spent on adult social care in ‘Revenue outturn social care and public health services (RO3) 2020 to 2021’ and the amount that local authorities were forecast to spend on adult social care in 2021/22, as outlined in the ‘Revenue account budget 2021 to 2022’ document. We then take this percentage change and apply it to the amount spent in 2020/21 from the ASCAFR. While this means that the forecast amount spent in 2021/22 will not be completely accurate, we feel that it is a fair assumption as the amount that local authorities spent on adult social care in 2020/21 (£18.7bn) accounts for approximately 90% of the £20.7bn spent on adult social care in the ASCAFR dataset.

We calculate the spending – excluding Covid support – data points on the chart by subtracting the additional local authority spending on adult social care (as laid out in Figure 3.1) from the total adult social care spending as described in the paragraph above.

Change in clients per head accessing long-term support during the year since 2014/15, by age band (Figure 3.8)

This is calculated as the number of people accessing long-term care during the year – from SALT table 36, in ASCAFR – divided by the number of people in the country in that year, as laid out in the ONS’s mid-year population estimates.

Children’s social care

Change in local authority spending on children’s social care in England since 2009/10 (real terms) (Figure 4.1)

The data point for 2020/21 is the actual spend on children’s social care, as outlined in the DfE’s ‘Local authority and school expenditure 2020 to 2021’ dataset. We use this time series rather than the spending on children’s social care as outlined in the local authority revenue outturn dataset because it captures a wider range of spending on the service than just local authority related spending. To calculate the forecast spend in 2021/22, we calculate the change in spending between the amount spent on children’s social care in ‘Revenue outturn social care and public health services (RO3) 2020 to 2021’ and the amount that local authorities were forecast to spend on children’s social care in 2021/22, as outlined in the ‘Revenue account budget 2021 to 2022’ document. We then take this percentage change and apply it to the amount spent in 2020/21 from the DfE figures. While this means that the forecast amount spent in 2021/22 will not be completely accurate, we feel that it is a fair assumption as the amount that local authorities spent on children’s social care in 2020/21 (£9.1bn) accounts for approximately 93% of the £9.8bn spent on children’s social care in the DfE dataset.

We calculate the spending – excluding Covid support – data points on the chart by subtracting the additional local authority spending on children’s social care (as laid out in Figure 4.2) from the total children’s social care spending as described in the paragraph above.

Additional pandemic-related children’s social care spending, 2020/21–2021/22 (Figure 4.2)

This information comes from the ‘Covid-19 financial impact monitoring information’ dataset, released in 20 rounds by DLUHC. Quarterly totals are calculated by summing monthly totals where this is relevant. Spending details for some months are not available in the dataset and in these instances we impute those monthly amounts through comparisons between year-to-date (YTD) amounts in different releases. For example, Round 17 does not include a monthly amount for October 2021, and only shows the financial YTD total for April to October 2021. But Round 16 includes YTD data to the end of August 2021 and forecasts spend for September 2021. Combining the August YTD actuals with the September forecast means that we could create a YTD September total, which, when subtracted from the YTD October actuals, would give an estimate for the spending in October 2021. This means that the monthly totals are likely to not be completely accurate, as September actuals might have differed from the September forecast, but they are close enough for the imputation to be useful.

It should be noted that it was impossible to impute separate totals for July and August 2021 and November and December 2021 because the survey data was released too infrequently for this to be possible. Instead, we calculate a total for the two months. This should not be a problem as, in both cases, the months fall in the same quarter (Q2 2021/22 and Q3 2021/22 respectively) and therefore are shown in aggregate on the chart.

Neighbourhood services

Additional Covid spending on neighbourhood services and other local authority-provided services, Q1 2020/21 to Q4 2021/22 (Figure 5.1)

This information comes from the ‘Covid-19 financial impact monitoring information’ dataset, released in 20 rounds by DLUHC. Quarterly totals are calculated by summing monthly totals where this is relevant. Spending details for some months are not available in the dataset and in these instances we impute those monthly amounts through comparisons between year-to-date (YTD) amounts in different releases.

For example, Round 17 does not include a monthly amount for October 2021, and only shows the financial YTD total for April to October 2021. However, Round 16 includes YTD data to the end of August 2021 and forecasts spend for September 2021. Combining the August YTD actuals with the September forecast means that we could create a YTD September total, which, when subtracted from the YTD October actuals, would give an estimate for the spending in October 2021. This means that the monthly totals are likely to not be completely accurate, as September actuals might have differed from the September forecast, but they are close enough for the imputation to be useful.

It should be noted that it was impossible to impute separate totals for July and August 2021 and November and December 2021 because the survey data was released too infrequently for this to be possible. Instead, we calculate a total for the two months. This should not be a problem as, in both cases, the months fall in the same quarter (Q2 2021/22 and Q3 2021/22 respectively) and therefore are shown in aggregate on the chart.

Neighbourhood services spending here includes all emergency spending on: cultural and related services; housing, environment and regulatory; and planning and development. ‘Other local authority spending’ is the remainder of local authority emergency Covid support, excluding spending on public health, local authority education support services, ‘other – costs associated with foregone savings/delayed projects’ and police, fire and rescue services. We exclude these items to make the totals in this chart comparable with other spending amounts in the chapter, where we also exclude public health, education and police, fire and rescue services. We exclude public health because this only became a local authority responsibility in 2013/14 while our time series for neighbourhood services spending extends to 2009/10, meaning that this spending would be incomparable with other spending amounts in the chapter. We exclude education and fire, police, and rescue services because local authorities do not have any control over the level of spending on these services.

Usable reserves as a proportion of total expenditure by type of authority, 2009/10–2022/23 (Figure 5.3)

We calculate usable reserves as the sum of ‘Estimated unallocated financial reserves level at 31 March’ and ‘Estimated other earmarked financial reserves level at 31 March’. Total service expenditure is calculated as the ‘Total service expenditure’ from the revenue summary minus ‘Public health’ spending and ‘Education services’ spending.

We conduct this calculation for shire district local authorities and for those local authorities with responsibility for adult social care (which include London boroughs, metropolitan districts, unitary authorities and shire counties). To calculate usable reserves as a percentage of total expenditure, we divide the calculated usable reserves by the total service expenditure.

7. Police

Change in gross police spending since 2009/10 (real terms) (Figure 7.1)

Police spending figures for 2021/22 in England and Wales are imputed by estimating the ratio of spend between the 2020/21 budget and actual spend and then applying this to the budget for 2021/22. Figures for 2020/21 are generated by combining DLUHC ‘Local authority revenue expenditure and financing England: 2020 to 2021 individual local authority data – outturn’, ‘Revenue outturn central, protective and other services’ RO6 tables for England 187 Department for Levelling Up, Housing and Communities, ‘Local authority revenue expenditure and financing England: 2020 to 2021 individual local authority data – outturn’, 2021, retrieved 7 October 2022, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2020-to-2021-individual-local-authority-data-outturn and StatsWales, ‘Revenue outturn expenditure summary, by service’ figures for Wales. 188 StatsWales, ‘Revenue outturn expenditure summary, by service’, Welsh Government, 2021, retrieved 7 October 2022, https://statswales.gov.wales/Catalogue/Local-Government/Finance/Revenue/Outturn/ revenueoutturnexpendituresummary-by-service Budget figures for England 2020/21 are taken from MHCLG, ‘Local Authority Revenue Expenditure and Financing Budget 2020-21, England’ Table 1 189 Ministry of Housing, Communities and Local Government, Local Authority Revenue Expenditure and Financing: 2020-21 budget, England, 2020, https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/922955/Local_authority_revenue_expenditure_and_financing_ England_2020_to_2021_budget_rev.pdf and figures for 2021/22 are taken from MHCLG, ‘Local Authority Revenue Expenditure and Financing Budget 2020-21, England’ Table 1. 190 Ministry of Housing, Communities and Local Government, Local Authority Revenue Expenditure and Financing: 2021-22 budget, England, 2021, https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/996192/Local_authority_revenue_expenditure_and_financing_in_ England_2021_to_2022_budget.pdf Figures for Wales for both years are taken from StatsWales, ‘Police authority budget requirement by police’. 191 StatsWales, ‘Police authority budget requirement by police’, Welsh Government, 2022, retrieved 7 October 2022, https://statswales.gov.wales/Catalogue/Local-Government/Finance/Council-Tax/Budget-Requirement/policeauthoritybudgetrequirement-by-policeauthority

Victim-reported crime methodology change (Figures 7.2 and 7.3)

The Crime Survey in England and Wales (CSEW) suspended face-to-face interviews on 17 March 2020 due to the pandemic. From the year ending June 2020, data tables include data from the Telephone-operated Crime Survey in England and Wales (TCSEW). These do not include crimes experienced by children aged 10 to 15 years. Further details are outlined in ONS, ‘User guide to crime statistics for England and Wales: measuring crime during the coronavirus (COVID-19) pandemic’, 21 July 2022, retrieved 7 October 2022, www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/methodologies/userguidetocrimestatisticsforenglandandwalesmeasuringcrimeduringthecoronaviruscovid19pandemic.

Public perception that local police are doing a good or excellent job, 2009/10–2021/22 (Figure 7.7)

Supplementary tables were not published as part of the CSEW in 2020/21 or 2021/22, as the new telephone survey limited time and questionnaire length. As a result, not all of the usual questions were asked to all participants. Data for a similar question, on rating the local police, is available for each quarter, however. The 2022 figure represents the average of responses from each quarter.

8. Criminal courts

Backlog calculations (Figure 8.8)

The latest official statistics for the backlog in the criminal courts are taken from the Quarterly Criminal Court Statistics up to March 2022. We calculate a backlog adjusted for complexity in three stages:

  • We calculate the number of jury and non-jury disposals that are missing by assuming that the share of cases coming into the crown court since March 2020 that end up as jury trials is the same as pre-Covid. The ‘missing’ cases are then the gap between those assumed to be entering the courts system and those that are completed each quarter.
  • We treat jury trials and other cases separately. We multiply the ‘missing’ number of both by [share of total hearing time]/[share of total cases] to get a complexity- weighted increase in the backlog.
  • An ‘ordinary’ backlog is more complex than the average of cases processed (specifically, more cases that will end up as a jury trial), so to adjust this number to be consistent with the pre-Covid backlog we multiply it by [average hearing time of backlog case mix]/[average hearing time of all cases].

9. Prisons

Change in spending on prisons since 2009/10 (real terms)

To project spending in 2021/22, for which the official total is not yet published, we uprate the 2020/21 spending figure in line with the increase in HMPPS spending between 2020/21 and 2021/22 published in the supplementary estimates laid before parliament in February 2022. 192 HM Government, Central Government Supply Estimates 2021-22: Supplementary estimates, 2022, p. 151, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1056679/E02711189_HC_1152_Supply_Estimates_21-22_Web_…

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Criminal justice Social care Schools
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Institute for Government

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