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The NHS productivity puzzle: Why has hospital activity not increased in line with funding and staffing?

The NHS crisis will only be solved with capital investment, increasing management capacity and staff retention – not just more doctors and nurses.

NHS staff walking down a hospital corridor.
NHS staff walking down a hospital corridor. Politicians need to urgently focus on capital investment, staff retention and boosting management capacity.

Politicians need to seriously engage with the real problems facing the NHS – or the decline in hospital performance levels will become extremely difficult to reverse.
This report – written jointly by the Institute for Government and Public First, and funded by the Health Foundation – assesses why NHS hospitals are failing to deliver higher activity despite higher spending on the service and higher levels of staffing over the last couple of years.

It argues that politicians need to urgently focus on capital investment, staff retention and boosting management capacity, and sets out key questions for policy makers to address if they want to solve the NHS crisis. The NHS has been on a longer-term negative trajectory: most of the challenges identified in the report existed before the pandemic and have been exacerbated since. 
The report particularly identifies the following as causes: 

  • Hospitals are chronically undermanaged, and where existing managers are operating they have too many constraints and poor incentives.
  • Underinvestment in capital – including a lack of hospital beds and many beds filled by people who should not be in them.
  • An exodus of senior staff – with inexperienced replacements recruited.  

The report also draws on interviews and roundtables with dozens of experts and clinicians. It is published after a terrible period for the NHS: the elective waiting list stands at over 7.4 million and continues to rise, ambulances took 90 minutes to respond to strokes in December, and 10% of people attending A&Es waited more than 12 hours in February.  
With NHS satisfaction levels at record lows and with an election next year, the report says politicians need to engage with key questions about how the crisis in hospitals can be addressed. 

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