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The rise and decline
of the NHS in England
2000-20

How political failure led to the
crisis in the NHS and social care

Chris Ham

 

April 2023
The rise and decline of the NHS in England 2000-20

 

Contents

Foreword

Key messages

Introduction

Telling the story

Explaining the decline of the NHS

Where next? Renewing the purpose of the NHS
References

Acknowledgements

About the author

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The rise and decline of the NHS in England 2000-20

 

Foreword

The NHS has just come through its most difficult winter in living memory - difficult
for both staff and for the patients that rely on it. Perhaps unsurprisingly, these
undoubted challenges have led some to question the fundamentals of the NHS.
This is why this report is so timely; rather than attributing the current situation to
some inevitable built-in decay, it draws out the decisions (or lack of them) that have
led to the current crisis. It is to be hoped that it will also help us avoid making the
same mistakes again, should a mix of reform and investment enable the same scale
of recovery we saw through the decade following 2000.

This report is the personal work of Chris Ham, who as many of you will know, was
Chief Executive of The King's Fund through much of the decade in question. This
has provided him with a unique insight into these years and we thank him for

this report.

Richard Murray
Chief Executive
The King's Fund

 
The rise and decline of the NHS in England 2000-20

 

Key messages

The story of decline

Multi-year funding increases above the long-term average and a series of
reforms resulted in major improvements in NHS performance between 2000
and 2010.

Performance has declined since 2010 as a result of much lower funding increases,
limited funds for capital investment, and neglect of workforce planning.

Although NHS performance held up well on most indicators in the early years
of the 2010s, deficits in NHS trusts became widespread by 2014 and the NHS
failed to hit key waiting time targets in 2014 and the following years.

Performance continued to decline for the rest of the decade, with the NHS and
social care both showing signs of growing stress across all services, including
mental health, learning disability services, primary care and community services.

Constraints on social care spending resulted in fewer people receiving publicly
funded social care and a repeated cycle of governments promising to reform
social care but failing to do so.

Long-term improvements in population health either stalled or went into
reverse after 2010, and successive governments were reluctant to use their
regulatory and fiscal powers to tackle the wider determinants of health.

Cuts in the public health grant to local authorities hindered work to improve
population health.

Increases in NHS activity and funding since 2000 have been much greater in
hospitals than other services and this has hindered ambitions to deliver more
care in people's homes or closer to home.

The coalition government (2010-15) and successive Conservative governments
since then have failed to heed the warning signs of deteriorating performance
and preferred to use short-term fixes rather than seek long-term solutions.

 
The rise and decline of the NHS in England 2000-20

 

Where next?

The improvements that occurred between 2000 and 2010 demonstrate that
the NHS is capable of reform if the political will exists and if governments take
a long-term perspective.

NHS revenue funding should increase in line with the long-term average.
There should be realistic targets for efficiency savings, and spending on capital,
education and training, and public health should be given priority.

Gaps in social care funding must be filled and there must be fundamental
changes to social care funding and provision.

Priority must be given to investing in primary care and community services
in order to anticipate people's needs, promote independence and offer
alternatives to hospitals.

There must be a credible and fully funded workforce plan for the NHS and,
ideally, social care.

There should be a sustained commitment to prevention and early intervention,
both in the NHS and in other public services, to tackle the wider determinants
of health and reduce inequalities.

The public must be fully engaged in improving health and care, and patients
and the public seen as active agents in their care, with responsibilities as well
as rights.

 
The rise and decline of the NHS in England 2000-20

 

Introduction

The broad sweep of developments in the NHS over the past two decades is well
known. A crisis in delivering care to patients in the winter of 1999/2000 led the
then Labour government to commit to multi-year funding increases on an
unprecedented scale. These increases and associated plans for specific services
resulted in improvements in many areas of care through the use of targets and
performance management, choice and competition, and inspection and regulation.

An independent assessment found that by the end of the 2000s 'there had been
considerable progress in moving the NHS towards being a high-performing health
system' (Thorlby and Maybin 2010, p 5), and public satisfaction reached an all-time
high in 2010 (Wellings et al 2022). This was the verdict of the National Audit

Office (NAO):

The increased money going into NHS hospitals has helped deliver more, better paid
staff, reduced waiting times, higher quality care and improved hospital facilities.
Until the end of 2009, the Department [of Health] has focused on delivering
national priorities - through a combination of targets, performance management,
incentives and guidance - within a fixed budget. This has resulted in improvements
in, for example: inpatient median waiting times from 12.9 weeks in 2000 to

4.3 weeks in 2010; outpatient waiting times from 4.8 weeks in 2005 to 2.7 weeks
in 2010; and the percentage of patients treated in A&E [accident and emergency]
within four hours from 78 per cent in 2003 to 98 per cent in 2009.

(NAO 2010, p 7)

These improvements stemmed from the NHS Plan (Secretary of State for Health 2000)
and the additional funding recommended in the Wanless report (2002). Substantial
increases in staffing and pay resulting from new contracts created the capacity for
the NHS to cut waiting times for treatment and improve high-priority areas of
clinical care such as cancer and cardiac care (Blythe and Ross 2022; Wanless et al 2007).
The establishment of the National Institute for Clinical Excellence (NICE) and work
on national service frameworks helped ensure that resources were targeted at
priority areas of care.

The global financial crash of 2008 and the election of a Conservative/Liberal Democrat
coalition government in 2010 heralded a marked change of direction. To restore

 
The rise and decline of the NHS in England 2000-20

 

stability in the public finances, the government introduced tight restrictions on
public spending in its first spending review as it embarked on one of the biggest
reorganisations of the NHS in its history. The NHS was required to manage with
real-term increases in its budget lower than the long-term average and much lower
than in the previous decade.

Even greater constraints were imposed on other public services, which experienced
real-terms cuts in spending of 20 per cent over the decade to 2019/20 (Zaranko 2020,
p 263). These other services, including housing and education - sometimes referred
to as the wider determinants of health - had a direct bearing on demand for health
and care. Local authorities were under a legal obligation to balance their budgets

and were required to make increasingly difficult decisions on the use of resources,
including on social care and public health.

The Conservative government elected in 2015 continued to exercise tight control
over public spending in what became known as a decade of austerity. The increases
in NHS spending agreed by the government were insufficient to deal with the costs
of rising demand and deficits that had built up after five years of constraints. Winter
pressures from 2014/15 onwards made the effects starkly visible as patients
encountered overcrowded A&E departments, long waits on trolleys for hospital
beds, and cancelled operations.

The cumulative impact of a decade of insufficient funding and ever more ambitious
targets for efficiency savings was exposed during and after the Covid-19 pandemic.
Shortages of ventilators and intensive care beds were a major concern in the early
stages; capacity constraints hampered the ability of the NHS to work through
backlogs in elective care in the later stages; and pressures on urgent and emergency
care intensified, leading to concerns about patient safety and excess deaths
resulting from delays in ambulance response times and overcrowded emergency
departments (McDonald et al 2023).

About this report

This paper analyses how a major public service that is highly valued by the public
(Buzelli et al 2022) was allowed to deteriorate. It focuses on the period since 2010
and the factors that contributed to the decline of the NHS after the progress that
had been made in the previous decade. The paper reviews the various policies that
were put in place and their impact on finances, performance and on patients and
the public. It shows how many individual decisions help explain what happened,

as well as big choices on public spending.

 
The rise and decline of the NHS in England 2000-20

 

The first part of the paper provides a detailed narrative account of developments
between 2010 and 2020. The second part offers an analysis of the factors that
contributed to decline. These factors included decisions on public spending, rising
demand for care, and the failure of politicians and the system in which they operate
to heed the warning signs and act accordingly. The paper concludes by setting out
what now needs to be done to sustain and reform the NHS.

 
The rise and decline of the NHS in England 2000-20

 

Telling the story

The Nicholson challenge

A starting point for this story is the NHS chief executive's annual report for 2008/9,
in which David Nicholson - who had been appointed in 2006 to tackle deficits
across the NHS and had done so successfully - warned that the NHS should
prepare for a much tighter financial environment (NHS Business Services Authority
2009). His report held out the prospect that 'investment will be frozen for a time'

in the light of the global financial crash and its impact on the public finances. More
specifically, Nicholson argued that the NHS would need to deliver productivity
improvements of between £15 billion and £20 billion between 2011 and 2014 in
order to keep pace with rising demand and improve the quality of care.

This became known as the Quality, Innovation, Productivity and Prevention (QIPP)
initiative and, more popularly, as the Nicholson challenge. Nicholson emphasised
the importance of focusing on quality in improving productivity, drawing on the
approach outlined in High quality care for all (Secretary of State for Health 2008), rather
than cutting costs alone. His view was that savings could be made while improving
the quality of care but not indefinitely. QIPP was therefore 'a holding operation

until the next spending review' (personal communication) on the assumption that
NHS spending constraints would be short-lived.

For the avoidance of doubt, the Nicholson challenge was designed to deliver
efficiency savings and was not about making cuts in services. In evidence to the
Public Accounts Committee (2011), Nicholson explained that 40 per cent of these
savings would be delivered by reducing the prices hospitals were paid for the work
they do. Another 40 per cent would result from the government's public sector
pay freeze, controls over management costs and reductions in central budgets.
The remaining 20 per cent derived from service changes such as moving care from
hospitals to the community.

The QIPP programme delivered efficiencies of £5.8 billion in 2011/12, £5 billion in
2012/13, and £4.3 billion in 2013/14 (Lafond 2015; Appleby et al 2014a). The biggest
items were cuts to the prices paid to providers and the staff pay freeze. When
deficits began to appear in 2013/14, they were concentrated in NHS trusts that
were most affected by reductions in the prices they were paid.

 
The rise and decline of the NHS in England 2000-20

 

Nicholson explained that NHS trusts were given responsibility for delivering
efficiency savings because 'I could not point to a single efficiency programme that
had been delivered by commissioners in the past nor could | point to a single
recovery programme that had been delivered by commissioners without the
injection of growth money' (personal communication). He also aimed to build up
significant surpluses at the centre and among commissioners that could be used
as a 'war chest' by NHS England when it was established in 2013.

An audit undertaken by The King's Fund of the coalition government's record on
the NHS concluded:

Our analysis shows that NHS performance held up well for the first three years
of the parliament but has since come under increasing strain. This has been
particularly evident on finance and the achievement of waiting time targets,
especially in 2014/15 when winter pressures catapulted the NHS back into the
headlines. Failure to hit the target that 95 per cent of patients should wait no
longer than four hours in A&E departments, increases in the number of patients
waiting to be discharged from hospital and rising numbers of providers in deficit
pointed to a service operating at and sometimes beyond capacity.

(Appleby et al 2015a, p 54)

The quarterly monitoring reports (QMR) published by The King's Fund beginning in
April 2011 tracked the impact of spending constraints by using publicly available
data on NHS performance and views from a panel of NHS finance directors. The
QMR published in January 2014 found that more than one in five hospitals would
be in deficit by the end of the financial year. Many NHS trusts used funds carried
over from previous years and surpluses built up when NHS funding was growing at
a faster rate to balance their books. These measures helped paper over the cracks
but did not address the underlying causes of financial distress.

The QMR published in October 2014 found that 'financial difficulties have spread
beyond those organisations with a history of problems balancing their books and

is [sic] now endemic across the system' (Appleby et al 2014b). Subsequent surveys
confirmed these trends, with 114 providers ending 2014/15 in deficit and a net
overspend of £800 million despite the transfer of resources from capital to revenue
(Appleby et al 2015b). Capital to revenue transfers continued in subsequent years and
amounted to £4.3 billion in the five years from 2014/15 to 2018/19 (NAO 2020b, p 7).

 
The rise and decline of the NHS in England 2000-20

 

The war chest created under the Nicholson challenge and underspending in some
centrally held budgets enabled the NHS as a whole to balance its budget. This

was in the context of the aggregate position in NHS trusts moving into deficit

in 2013/14 and in foundation trusts in 2014/15 (Appleby et al 2015a). Financial
performance continued to decline in subsequent years, with The King's Fund
noting that 'rising costs, cuts in the payments they receive for treating patients and
increasing demand make 2015/16 the most challenging year for NHS providers this
century' (Appleby et al 2015b).

Concerns about the size of NHS deficits raised the possibility that the Department
of Health might breach its spending limit in 2015/16. This was narrowly avoided
on a technicality but it was a close-run thing (Hawkes 2016). Even the best efforts
of experienced finance leaders to move money around to balance budgets at a
national level appeared to have reached their limits.

Notwithstanding concerns about pressures in A&E departments in 2012/13,
performance against waiting time targets held up in 2013/14 - helped in part by a
relatively mild winter. Relief was short-lived, however, and 2014/15 was the worst
year for breaches of the national 18-week target for admitted patients since it was
announced in 2004 and achieved in 2008 (Appleby et al 2015b). Hitting waiting time
targets became even more difficult in 2015/16, with The King's Fund reporting that
on the five main waiting time measures, average performance across the NHS was
poor (Appleby et al 2016).

In its assessment of the state of care in 2015/16, the Care Quality Commission
(CQC) stated that while some health and care services were improving, others
were not, and there was evidence of a deterioration of quality (CQC 2016, p 6). A
particular concern was the fragile state of social care, which was at a 'tipping point'
despite the government allocating some additional funds to help councils meet
rising demand.

Throughout this period, NHS leaders were working to implement the coalition
government's reforms devised by Health Secretary, Andrew Lansley, and famously
described by David Nicholson as 'the only change management system that you
can actually see from space - it is that large' (Timmins 2018, p 41). These reforms,
which were designed to embed competition in the NHS, abolished strategic health
authorities and primary care trusts, resulting in the loss of many experienced NHS
leaders. Time that could have been spent improving NHS efficiency was directed to
restructuring, which was widely perceived as both damaging and distracting.

 
The rise and decline of the NHS in England 2000-20

 

The NHS was also focused on responding to the findings of the Francis report into
failures of patient care at Mid Staffordshire NHS Foundation Trust (Mid Staffordshire
NHS Foundation Trust Public Inquiry 2013). This was a high priority for Jeremy Hunt,
who took over from Lansley as Health Secretary in 2012. Among other things,

NHS organisations sought to ensure that they had safe staffing levels, including
recruiting additional nurses, midwives and related staff. Many organisations

relied on agency staff for this purpose and the high cost of these staff put further
pressure on overstretched budgets.

The Stevens challenge

David Nicholson left office warning of the risk of 'managed decline' in the NHS
(Johnston 2014) and was superseded by Simon Stevens as chief executive of NHS
England in April 2014. Stevens' plans for the NHS were set out six months later in
the NHS five year forward view, which proposed the development of new care
models with the aim of transforming service delivery (NHS England et al 2014). These
care models were designed to achieve closer integration of care in response to
changing needs in the population.

The Forward View highlighted the financial challenges facing the NHS and social
care and formed the basis of discussions between Stevens and the Treasury on how
the expected funding gap of £30 billion by 2020/21 could be filled (Timmins 2018,
pp 68-70). This funding gap and the required efficiency savings became known as
the Stevens challenge.

The Forward View was explicit in recognising that delivering efficiency savings
depended on action on prevention to reduce demand. It also underlined the need
to sustain and improve social care and bring about system-wide improvements in
care. Stevens' core message was that 'there are viable options for sustaining and
improving the NHS over the next five years, provided that the NHS does its part,
allied with the support of government, and of our other partners, both national and
local (NHS England et al 2014, p 5 [original emphasis]).

The government announced a down payment on future investment of £2 billion

in December 2014 ahead of a commitment in the Conservative Party's election
manifesto in 2015 to an overall increase of £8 billion by 2020/21. The 2015
spending review delivered on this commitment with additional funding frontloaded
to 2016/17 in recognition of the scale of financial deficits across the NHS.

The extra resources earmarked for the NHS derived in part from cuts in other

 

10
The rise and decline of the NHS in England 2000-20

 

Department of Health budgets, including public health spending, capital spending,
and education and training.

Extra resources were intended to tackle deficits and fund transformations in care,
building on the new care models announced in the Forward View. The vehicle for
doing so was sustainability and transformation plans (STPs) (later renamed as
partnerships), which brought together NHS organisations and their partners in more
than 40 areas of England to plan and deliver system-wide improvements in health
and care for their populations. STPs were at the heart of Stevens' vision to integrate
health and care more effectively. Without actually altering legislation, the reforms
he led had the effect of reversing many of the market-oriented changes introduced
by the coalition government.

This did not prevent critics from arguing that STPs would lead to greater privatisation
of NHS provision and open the door to the introduction of accountable care
organisations, drawing on experience in the United States. These concerns

were accentuated by the speed at which STPs were introduced and the lack of
transparency in their operation. Local authorities and voluntary and community
sector organisations expressed concerns that they were being marginalised. Critics'
fears were fuelled as plans emerged in some areas for radical changes in service
provision, including major reductions in the number of hospital beds (Alderwick

et al 2016).

In the context of a requirement on the NHS to find £22 billion of efficiency savings
to meet the Stevens challenge, it was not surprising that work on STPs increasingly
focused on ways of achieving financial balance as well as developing new care
models. This helps explain proposals in some areas to cut back on hospital services
in order to invest in primary care, community services and other priorities. Changes
in guidance from NHS England on what was required added to the challenges faced
by STP leaders (Alderwick et al 2016).

The King's Fund found widespread scepticism among finance directors that the
necessary savings could be delivered (Appleby et al 2016). Events showed their
scepticism to be well founded, with NHS organisations struggling to balance their
books and hit waiting time standards even with the additional resources committed
by the government. While the frontloading of the 2015 settlement was welcomed,
the consequences for patient care of lower increases in 2017/18 and beyond were
a major concern.

 

11
The rise and decline of the NHS in England 2000-20

 

One of the challenges in managing deficits was fragmentation among the national
bodies responsible: NHS England, Monitor, and the Trust Development Authority
(Timmins 2018, pp 72-74). Steps were taken to address this fragmentation by
requiring Monitor and the Trust Development Authority to merge in all but name in
2015. The resulting body, NHS Improvement, worked ever more closely with NHS
England until their formal merger in 2022. Notwithstanding these workarounds,
the lack of a unified centre - a legacy of Andrew Lansley's reforms - undoubtedly
hindered efforts to restore financial stability in the NHS.

A former senior civil servant interviewed for this paper made a related point in
emphasising the loss of NHS knowledge and expertise in the Department of
Health after the establishment of NHS England, when many senior staff left the
Department to work at NHS England. Instead of providing leadership of the whole
health and care system, the Department focused on its role as a department of
state. This meant that the 'top of the office' lacked people with a deep knowledge
of health and care able to advise ministers on what needed to be done (Douglas,
personal communication).

Towards the end of 2017, Stevens took the unusual step of speaking publicly about
the impact of several years of constrained funding, stating that 'The NHS can no
longer do everything that is being asked of it' (Stevens, cited in Ham 2017b). His
comments aligned with remarks by David Nicholson after he left office, in which

he criticised the leaders of all political parties for not facing up to the scale of

the problems in the NHS and social care (Campbell 2015). Stevens suggested that
one way of increasing NHS funding would be for the government to honour the
commitment made during the referendum on European Union (EU) membership by
the Leave campaign and provide the NHS with an additional £350 million a week.

Following tense discussions in Whitehall, Stevens' arguments eventually bore fruit
when the then Prime Minister, Theresa May, promised additional funds for the NHS
to coincide with its 70th anniversary in July 2018. In the event, the government
committed increases of around £20 billion over five years equating to annual
real-term increases averaging 3.4 per cent. These increases were below those
advocated by The King's Fund, the Health Foundation and Nuffield Trust, and they
applied only to NHS running costs - as in the 2015 spending review settlement -
thereby excluding funding for public health, capital expenditure, and workforce
training and development.

 

12
The rise and decline of the NHS in England 2000-20

 

Stevens set out in the NHS Long Term Plan in January 2019 how these funds
would be used and the benefits they were expected to deliver through integrated
care systems (ICSs), the successors of STPs (NHS England 2019). Throughout this
period, he also continued to emphasise, alongside Jeremy Hunt, Secretary of State
for Health and Social Care, the need for social care to receive additional funding.
Failure to reform social care in line with the recommendations of the Dilnot
Commission was a legacy of the coalition government, as was the use of the Better
Care Fund, introduced in 2013 to channel some NHS resources into social care and
promote the use of pooled budgets. The government also allowed local authorities
to increase council tax to raise extra resources for social care.

Timmins (2018) argues that Stevens' negotiations with Theresa May and her
chancellor, Philip Hammond, were more difficult than with David Cameron and
George Osborne because May and Hammond had not been involved in Stevens'
appointment and were more sceptical than their predecessors of claims for
increased spending. This was in part because May and Hammond had both run
spending departments that had been affected by austerity and were not convinced
that extra funding really was needed to avoid a further deterioration in patient care.
The fact that independent organisations such as The King's Fund and the Institute
for Fiscal Studies (IFS) were making the case for additional funding strengthened
Stevens' hand, as did increasingly blunt warnings about the state of the NHS and
social care from the CQC (CQC 2017).

As the CQC noted in its 2018/19 state of care report:

There is pressure on all health and care services in England. Waiting times for
treatment in hospitals have continued to increase and, like many areas in the NHS,
demand for elective and cancer treatments is growing, which risks making things
worse. In hospital emergency departments, performance has continued to get worse
while attendances and admissions have continued to rise. July 2019 saw the highest
proportion of people spending more than four hours in A&E than any previous

July for at least five years. What used to be a winter problem is now happening in
summer as well. While other hospital services improved slightly this year, the quality
of care in NHS urgent and emergency services in hospitals has deteriorated. The
stability of the adult social care market remains a particular concern.

(cQc2019,p 7)

The CQC's 2018/19 report highlighted challenges in mental health and learning
disability services as a particular concern. These challenges included people with

 

13
The rise and decline of the NHS in England 2000-20

 

severe and enduring mental ill health being in inappropriate placements far from
home, and people with learning disability or autism being hospitalised, segregated
and placed in overly restrictive environments.

The CQC argued that more and better community care services were needed to
help people avoid crisis situations. And although the overall quality of primary
medical services was high, the CQC reported that accessing services could be a
challenge, foreshadowing rising pressures on general practices that were to become
a much bigger problem in the years that followed. The CQC emphasised the need
for more support to be given to innovation - for example, in the development of
new staff roles and the use of technologies to deliver care in more effective ways.

As the decade drew to a close, and before the pandemic struck, The King's Fund's
quarterly monitoring reports found that performance against waiting time targets
remained poor and financial deficits persisted, notwithstanding the additional
resources committed by the government (Anandaciva and Ward 2019). Finance
directors were pessimistic about NHS England's expectation in the NHS Long Term
Plan that the provider sector would meet targets to achieve financial balance in
2020/21 and that all NHS organisations should be in balance by 2023/24. They
were also concerned about underinvestment in social care, capital spending, the
NHS workforce and public health.

The NAO reported that NHS trusts bridged the gap between income and
expenditure with top-up loans from the Department of Health. Between 2015/16
and 2019/20, the amount loaned increased from £5 billion to £15 billion, of which
£13 billion related to interim loans mainly used for day-to-day expenditure. In
April 2020, £13.4 billion was written off by the Department in recognition that
there was no prospect that the monies would be repaid. The NAO described these
arrangements as 'not fit for purpose and unsustainable' (NAO 2022, p 33).

The NHS in the international context

International assessments have noted the strengths of the NHS alongside its
weaknesses, including poor outcomes of care as measured by cancer survival rates,
deaths associated with cardiovascular disease, and infant mortality. In its analysis,
the Organisation for Economic Co-operation and Development (OECD) highlighted
cancer care as an example of how 'on international benchmarks of health care
guality... some indicators for the United Kingdom show average or disappointing
performance' (OECD 2016, p 29). These findings were echoed in a review of OECD

 

14
The rise and decline of the NHS in England 2000-20

 

data conducted by The King's Fund, the IFS, the Health Foundation and Nuffield
Trust (Dayan et al 2018).

The review found that the UK performed less well than other countries on several
indicators of health outcomes, including the rate at which people died when
successful medical care could have saved their lives. Published to coincide with the
70th anniversary of the founding of the NHS, the review concluded that 'the NHS
performs neither as well as its supporters sometimes claim nor as badly as its critics
often allege' (Dayan et al 2018, p 4). This was in line with surveys carried out by the
Commonwealth Fund (Schneider et al 2021; Davis et al 2010) showing the UK falling
from 2nd in the rankings of 7 countries in 2010 to 4th out of 11 countries in 2021.

The absence of financial barriers to people accessing care in the UK remained a
strength throughout the decade.

A major study carried out by a commission set up by The Lancet and the London
School of Economics and Political Science (LSE) concluded:

Many health outcomes are substantially worse in the UK than in other high-income
countries... most of which spend a greater proportion of GDP [gross domestic
product] on health and care... This Commission argues that not only can the UK,

as a wealthy country, afford to increase spending on health but also that spending
should increase if the UK''s poor health outcomes, relative to other EU15* and

G7 countries, are to be improved and that additional health expenditure can
benefit macroeconomic growth and societal welfare... the effect of low amounts of
health spending in the UK, relative to other EU15 and G7 countries, is compounded
further by relatively low amounts of spending on social care.

(Anderson et al 2021, p 1920)

It might be added that public satisfaction with the NHS fell to its lowest level in over
a decade in 2018 and to its lowest level since 1997 in 2021 (Wellings et al 2022).
Despite these falls, there continued to be strong support for the NHS among the
British people. Claims by some commentators that the NHS model was
fundamentally broken and that the UK would be better served by adopting the
social insurance systems used in parts of Europe appeared to have little

public support.

1 EU15 describes the 15 countries in the EU before 2004 and before the UK exited: Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the UK

 

15
The rise and decline of the NHS in England 2000-20

 

There was, however, widespread recognition of the extent to which patient care had
deteriorated during the decade (Davies et al 2022). The impact on waiting times was
particularly stark as slow declines in performance in the early part of the decade
accelerated towards its end (Lee 2023; Baker 2022).

 

Figure 1 Waiting times for NHS cancer care, planned routine hospital treatment
and A&E care have substantially deteriorated over the past decade

 

1,800 -
Covid-19

1,600

1,400

100

1,200

1,000

800

660

Index (2011/12)

400

200

 

=-- A&E = Planned hospital care = Two week wait for cancer
Source: The King's Fund analysis of NHS England data, adapted from Lee, G (2023)

A&E: number of patients waiting over four hours in A&E from arrival to admission, transfer or discharge.
Planned hospital care: number of pathways yet to start consultant-led treatment more than 18 weeks from
GP referral. Two week wait for cancer: patients waiting more than two weeks from GP urgent referral for
suspected cancer and first consultant appointment. Year to date figures for 2022-23 are average of monthly
figures. To allow comparison across different data sets, data are indexed so levels in 2011/12 = 100.

 

16
The rise and decline of the NHS in England 2000-20

 

Explaining the decline
of the NHS

The above account makes clear that funding pressures in the NHS and social care
played a major part in deteriorating performance between 2010 and 2020. We
now go on to put these pressures in context and to discuss the other factors that
contributed to the decline.

These factors include failures to moderate rising demand for care resulting from
a growing and ageing population. lll health within the population (see below) has
added to the pressures on services and the needs of people with multimorbidity
present challenges to specialist models of care focused on single diseases
(Whitty 2017). Failure to implement policies designed to address these challenges
contributed to decline.

Analysis of trends in NHS activity and spending between 2000/1 and 2017/18
showed that growth was greater in hospitals than in primary care and community
services. This was despite policy commitments to shift care and resources away
from hospitals and into the community, and to develop new care models. The
analysis concluded that primary and community services were therefore 'struggling
to meet the demands of a population with an increasing number of long-term
complex conditions' (Tallack et al 2020, p 68). The NAO reported that the proportion
of the NHS budget spent on primary care and community services fell between
2015/16 and 2018/19 (NAO 2020a, p 10).

As noted earlier, there were also real-terms cuts in public spending outside health
care of 20 per cent over the decade to 2019/20. One assessment noted that 'Cuts
to housing and communities budgets have left Britain's dwellings in such a dire
state that they are now causing deaths among children' (Burn-Murdoch 2022a).
Awareness of these wider determinants of health was not new but became more
visible as a result of austerity.

 

17
The rise and decline of the NHS in England 2000-20

 

Constrained resources

Long-term trends in NHS spending show average annual increases of around
3.6 per cent in real terms (Warner and Zaranko 2022). There were wide variations
around the average, with the lowest increases in England occurring between
1982/83 and 1985/86 and the largest between 1999/2000 and 2003/4 using
five-year moving averages (Harker 2019). These differences can be explained by
the state of the economy and public finances as well as political choices by the
government of the day.

Another way of looking at spending is to adjust funding increases for changes in the
size and composition of the population. On this basis, analysis shows that health
care spending per person adjusted by age grew by 2.6 per cent a year in real terms
between 1979/80 and 2020/21, with the biggest increases occurring between
1997 and 2010 and the lowest in the period after 2010 (Appleby and Gainsbury
2022). These comparisons underline the squeeze exerted on the NHS.

International comparisons show that UK health spending would have been

£40 billion higher every year between 2010 and 2019 if it had matched the EU142
average (Rebolledo and Charlesworth 2022). Comparisons also demonstrate that
health care capacity in the UK is lower than in many other countries as seen in

the number of hospital beds, doctors and nurses, and medical equipment such

as scanners.

Earlier in this report, we noted that governments sought to protect spending on
NHS running costs by diverting resources from other parts of the Department of
Health''s budget such as capital spending and reducing spending on public health,
education and training, and central administration. Decisions taken in the 2015
spending review amounted to a cut of more than 20 per cent in these other
budgets or more than £3 billion in real terms by 2020/21 (Nuffield Trust et al 2015).

The effects were felt in reduced funding for local government via the public health
grant to invest in prevention; cuts in training budgets, which included removing
bursaries for nursing students and lengthy delays in developing a fully funded
workforce plan to address growing staff shortages; a growing maintenance backlog,
giving rise to concerns about the safety of NHS buildings; and lack of funds for new
hospital buildings and investment in information technology (Warren 2022).

2 EU14 refers to: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, and Sweden.

 

18
The rise and decline of the NHS in England 2000-20

 

A former senior Treasury official who chairs an NHS trust has criticised NHS
England and the Department of Health and Social Care for favouring headline
increases in NHS spending at the expense of these other budgets (Gieve, cited in
Anderson 2023).

Efficiency savings

One of the consequences of funding constraints was to put the onus on NHS
organisations to find ever more challenging, and often less credible, efficiency
savings. Some of these savings were delivered by blunt controls over staff pay
and the prices paid to providers, and others by attempts to put in place new care
models. Non-recurrent savings also contributed and by definition were only a
short-term stop-gap. NHS organisations increased productivity year-on-year by
an average of 0.8 per cent but this was insufficient to fill the funding gap.

The persistence of deficits in many organisations reflected the difficulty of
realising sustainable savings while at the same time delivering safe standards of
care. The impact was not felt immediately after the general election in 2010 as
funding increases in the previous decade meant that the balance sheets of most
NHS organisations were healthy. As opportunities to increase efficiency became
more difficult to identify, some organisations sought to grow income, sell assets
and explore other options for balancing their budgets. The escalating costs of
hiring staff to fill vacancies added to the challenge, as NHS organisations became
increasingly dependent on agency staff.

Reflecting on these issues, The King's Fund observed that:

There is little doubt that compared with earlier periods when the NHS was faced
with tightly constrained budgets, there is now much less scope for containing or
cutting costs by diluting the quality of care. Deliberately allowing waiting lists to
lengthen or not filling staff vacancies when they arise - methods used in the 1990s,
for example - are off the agenda because of the priority attached by successive
governments to improving access and quality of care combined with ever closer
scrutiny of NHS performance by regulators and others. In these circumstances
loss of financial control becomes the main safety valve, providing that government
is prepared to sanction overspending. With the NHS now topping the list of the
public's concerns ahead of the election campaign, ministers have had little choice
other than to find additional resources to deal with deficits to reassure voters
about their intentions and commitment to the NHS.

(Appleby et al 2015a, pp 55-56)

 

19
The rise and decline of the NHS in England 2000-20

 

NHS England used various mechanisms such as financial control totals and
transformation funds to rein in deficits but with limited success. The priority given
to sustaining services also meant that funds intended to support transformation
were not always used for this purpose. This held back the development of the

new care models at the heart of the Forward View and the NHS Long Term Plan.
Analysis of OECD data showed that the UK allocated more of its health care budget
to hospital care and less to preventive, residential and outpatient care than in
comparable countries (Burn-Murdoch 2022c).

Failure to invest more in services in the community hindered efforts to reduce
demand for hospital care and respond to the changing burden of disease. One
study noted that growth in the workforce was greater in hospitals than in general
practice, resulting in 'more capacity for doctors to refer patients and to undertake
outpatient procedures as technology advanced' (Tallack et al 2020, p 61). This study
found that elective procedures grew by 9.6 per cent each year compared with
growth of GP consultations of only 0.7 per cent per year between 2000/1 and
2017/18 (Tallack et al 2020, p 33).

The expansion of activity and funding in hospitals is one factor that has contributed
to rising demand and the pressures on urgent and emergency care. The recently
published plan for recovering urgent and emergency care services recognises this

in setting out proposals for expanding care in the community and people's homes
(Department of Health and Social Care and NHS England 2023). While the plan is
welcomed, it misses an opportunity to support patients to manage their own care
more effectively and avoid the need for hospital care. We return to this point in the
final part of this paper.

Capital spending

International comparisons show that capital spending in the NHS is lower than in
comparable countries (Kraindler et al 2019). The NAO found that the UK invested
the least in health care capital per head across the OECD (NAO 2020a, p 32). This
had two main consequences.

The first was that maintenance arrears were neglected. The bill for carrying out this
work is currently estimated to be more than £10 billion. This includes the cost of
repairing hospitals with structural defects such as leaking roofs that create risks for
staff and patients. Analysis suggests there has been a gradual deterioration in the
condition of the NHS estate since 2013 (Warner and Zaranko 2022).

 

20
The rise and decline of the NHS in England 2000-20

 

The second was that funds for new buildings and the purchase of equipment were
in short supply. Spending on information technology and other investments with
the potential to transform care was also challenging. This acted as a brake on the
development of new care models and the gains in productivity they offered.

Decisions taken during spending reviews to increase headline allocations to the
NHS by cutting capital spending help explain how this happened. In-year transfers
of funds from capital budgets to cover revenue deficits resulting from low funding
increases also contributed. To make matters worse, the NAO found that in the early
2010s, the NHS underspent the available capital budget (NAO 2020b).

The IFS's view is that 'the government's approach to capital spending in recent
years has not lent itself to the effective planning and delivery of investment in the
health service' (Stoye and Zaranko 2019) while another analyst has described the
UK's record on capital investment as 'truly worst-in class' (Burn-Murdoch 2022c).
The House of Commons Public Accounts Committee noted recently that the
government promised to publish its long-term strategy for capital in autumn 2020
but by the time of writing it had not appeared (Public Accounts Committee 2023).

Workforce planning

Failure to publish a credible workforce plan in the 2010s was particularly
consequential given that improvements in NHS performance between 2000 and
2010 resulted in part from substantial increases in staffing and pay, as noted at the
beginning of this paper. Persistent vacancies, increasing reliance on agency staff
and, latterly, concerns about retaining staff in the context of the pandemic and the
huge pressures facing the NHS and social care demonstrate the urgency involved.
A review by the Health Foundation, The King's Fund and Nuffield Trust set out
what needs to be done and the scale of investment required (Beech et al 2019).

Workforce shortages are as old as the NHS and reflect failures to train enough
staff in the UK. This has resulted in reliance on international recruitment. Brexit
and political debate about immigration to the UK have raised questions about
this source of staff, not least because of ethical concerns about recruitment from
countries that also require staff to sustain their own health services (McCarey et al
2022). Staff pay and conditions are also a major consideration, as demonstrated
by industrial action in early 2023 in the midst of the cost-of-living crisis and rising
inflation. The pandemic's toll on staff health and wellbeing has accentuated an
already difficult challenge.

 

21
The rise and decline of the NHS in England 2000-20

 

Tackling these issues demands long-term thinking, which at present appears
absent. In a highly critical report published in July 2022, the all-party House of
Commons Health and Social Care Committee urged the government to publish
workforce projections, arguing that 'Without full and frank transparency on
projected workforce gaps, the public and NHS staff can have little confidence that
the Government has grasped the depth of the workforce crisis' (House of Commons
Health and Social Care Committee 2022, p 57). NHS vacancies well in excess of
100,000 posts illustrate the scale of the current challenge (Public Accounts
Committee 2023, p 14). There are even more vacancies in the social care workforce.

Social care spending and reform

The interdependence of the NHS and social care has long been recognised, as has
the need to put social care on a sustainable footing. It appeared that some progress
was being made under the coalition government through enactment of the care
cap recommended by the Dilnot Commission in the Care Act 2014. In the event,
the Conservative government postponed and then abandoned implementation of
the cap and resorted to various short-term measures in an attempt to shore up an
increasingly fragile social care market. These measures were intended in part to
relieve pressures on the NHS, as seen in increasing numbers of delayed transfers

of care and the associated risks of high levels of bed occupancy.

The government''s actions included injecting some additional funds into social

care, making use of the Better Care Fund, and allowing local authorities to raise
more money for social care through the council tax. While these were welcome
moves, they amounted to sticking-plaster solutions in the face of cuts in real-terms
spending on social care of 11 per cent per adult resident by councils between
2009/10 and 2015/16, and a reduction of 400,000 in the number of people
receiving publicly funded social care (Bottery et al 2018, p 8). The ability of social
care providers to continue delivering services under contract to local authorities

in the face of spending pressures was brought into question.

The Better Care Fund (BCF) - designed to encourage more pooling of budgets
between local authorities and the NHS (Bennett and Humphries 2014) - was seen as
a key innovation by the coalition government. The fund brought together resources
from existing budgets, with the majority coming from the NHS. At the time it was
introduced, Humphries (2014) commented that 'the BCF is well-intentioned but

no substitute for a proper transformation fund to meet the double-running costs
of shifting care closer to home and short-term action to address the gathering
financial storm'. Simon Stevens expressed the same point more graphically when

 

22
The rise and decline of the NHS in England 2000-20

 

he argued that you do not get a watertight solution when you merge two leaky
buckets (Stevens 2014).

The renaming of the Department of Health as the Department of Health and

Social Care in 2018 offered hope of a fresh approach to social care, but in practice,
Theresa May''s government showed little interest in taking up the challenge. One
reason may have been the difficulty faced by the Conservative Party at the 2017
general election, when its manifesto abandoned the commitment to introduce a
cap on care costs and instead proposed that people should be responsible for these
costs until they were left with £100,000 of assets. The manifesto also proposed
applying the means test to people receiving domiciliary care by taking into account
the value of the family home.

These proposals were quickly dropped in the face of widespread criticism, leaving
uncertainty about what, if anything, a future Conservative government would do.
In the event, Boris Johnson lent his support to the care cap when he succeeded
Theresa May as prime minister - albeit in less generous form than planned by the
coalition government - and proposed a health and care levy to pay for it. His
resignation in July 2022 and the political turmoil that followed led to the levy being
scrapped and implementation of the care cap was postponed. The future of social
care was once again thrown into doubt.

Additional funds for social care announced in 2021 by the government have been
described as 'derisory in relation to the scale of what needs to be done' (Humphries
2022, p 218). Meanwhile voices outside government argue that attitudes to

care and support need to be rethought based on a national care covenant that
recognises the role of citizens, families, communities and the state in providing
support and paying for it (The Archbishops of Canterbury and York 2023). There is
widespread agreement that social care should promote independence and aid
recovery, but funding and staffing shortages make this difficult.

The Conservative government published a vision for adult social care in December
2021 (Department of Health and Social Care 2021) with three objectives.

* People have choice, control, and support to live independent lives.

* People can access outstanding quality and tailored care and support.

o People find adult social care fair and accessible.

There remains a large gap between these objectives and the experience of many
people using social care after a decade of austerity.

 

23
The rise and decline of the NHS in England 2000-20

 

One of the constraints on progress during the past decade has been lack of
expertise in and understanding of social care among officials in the Department of
Health and Social Care, despite the Department having had responsibility for social
care before its change of name. This was exposed early on in the Covid pandemic
when the government had to act quickly to fill gaps in its capabilities in order to
provide support to a sector at the forefront of the response. The government
appointed an experienced social care leader and set up a Social Care Sector
Covid-19 Task Force to ensure that social care providers received some of the
support they needed (Ham, forthcoming).

This kind of expertise was not available in the Department of Health after the
departure in 2016 of Jon Rouse, the last person to serve as Director General for
social care, local government and care partnerships. Rouse and his predecessors
such as David Behan and Denise Platt played a vital role at the centre, and the
loss of their credibility and experience left a vacuum that was widely criticised

by social care leaders (Humphries and Timmins 2021). It also meant there was little
counterbalance within the Department to declining political interest in social care.
The lack of a senior voice able to speak on behalf of the social care sector

did not help.

Preventing ill health

Taking a longer-term perspective, it can be argued that the root causes of the
deterioration of NHS performance were located in the failure of successive
governments to act on the insights of the 2002 Wanless Review and its argument
that the NHS would become unsustainable unless the population was 'fully
engaged' in preventing illness and promoting health:

The desirable health outcomes depicted in the fully engaged scenario are only likely
to come about with a step change in the way public health is viewed, resourced and
delivered nationally. This will support a future public more engaged in maintaining
their health... The benefits of reaching such a situation are large: significantly better
health outcomes for the same or lower expenditure... Thanks to the health outcome
benefits associated with investment in public health, the UK would find itself much
better placed to deal with such pressures under the fully engaged scenario...

(Wanless 2002, p 118)

By not taking the road advocated by the Wanless Review, there was insufficient
attention to prevention and the wider determinants of health, despite Andrew

Lansley's ambition that the Department of Health should become a department
for public health. Analysis shows that improvements in population health stalled

 

24
The rise and decline of the NHS in England 2000-20

 

or went into reverse during the 2010s at the very time when risk factors such
as obesity - for which the UK has the highest rates in Europe - were having an
increasing impact (Buck et al 2018).

The poor health of the population was reflected in rising demand for care (Baker
2022) and contributed to the UK having high rates of excess deaths from Covid-19
and other causes. The effects were particularly stark in the most deprived
communities and in the Black and Asian population. Increased mortality from
Covid-192 and other causes contributed to reductions in life expectancy in 2020
of 1.3 years for males and 0.9 years for females, resulting in the lowest life
expectancy since 2011 (Fitzpatrick and Roberts 2021). Growing numbers of people
who are economically inactive as a result of ill health are another cause of concern
(Burn-Murdoch 2022b; Tinson et al 2022).

The Global Burden of Disease study showed that the number of years of life spent
with long-term poor health is now greater than the number of years of life lost due
to preventable deaths (Steel et al 2018). The most common causes of that burden

in the UK are back pain, poor mental health, skin conditions, and sight and hearing
loss. This means that people are spending more years living in poor health as the
gap between lifespan and health span widens.

The Forward View did argue for 'a radical upgrade in prevention and public health'
(NHS England et al 2014) while the NHS Long Term Plan outlined the role of the
NHS in prevention and tackling health inequalities (NHS England 2019). There
were also aspirations to harness the 'renewable energy represented by patients
and communities' (NHS England et al 2014, p 9). Local examples such as the Wigan
Deal and initiatives in other areas to make use of all available assets illustrated
the possibilities (Lent et al 2022; Naylor and Wellings 2019), but national leadership
was lacking.

Various government policies aimed at tackling risk factors such as smoking, diet
and physical activity have been proposed in the past decade 'but many have been
abandoned or not moved beyond consultation stage, even where there is strong
evidence of their effectiveness' (Everest et al 2022). Minimum pricing of alcohol is
an example. A consultation document on prevention was published in 2019, but at
the time of writing, the government had yet to publish its response to submissions
received during the consultation and the actions it intends to take (Public Accounts
Committee 2023).

A major study of obesity policy in England between 1992 and 2020 noted that the
policies adopted by government focused primarily on individuals making behaviour

 

25
The rise and decline of the NHS in England 2000-20

 

changes, and hesitated to use interventionist approaches (Theis and White 2021).
This reflects the reluctance of governments to be seen to be acting as a 'nanny
state' and a preference for working on the basis of voluntary agreements with
businesses - for example, through the Public Health Responsibility Deal launched
in 2011. A partial exception is the soft drinks industry levy or 'sugar tax', which was
enacted in 2016 and came into force in 2018.

Analysis of policies to tackle risk factors has shown how disjointed policy-making
has undermined efforts to achieve health improvement targets (Everest et al 2022).
An inability to learn from previous policy failures and devise policies that lend
themselves to implementation has also contributed (Theis and White 2021). A further
barrier is that the public health system in England is complicated, with roles and
responsibilities shared between a range of national and local bodies and no one
agency having a clear leadership role (Buck et al 2018).

Responsibility for public health was transferred from the NHS to local government
in 2013 but successive governments have failed to provide the resources for
councils to fulfil their functions effectively. Reductions in the public health grant to
local government since 2015/16, for example, resulted in cuts in spending of 24 per
cent per person in real terms and affected many services, including stop smoking
services, drug and alcohol services for adults, and sexual health services (Finch
2022). Reductions in spending on other public services such as housing and leisure
accentuated the impact of these cuts (Buck et al 2018).

Failure demand

We have seen how NHS activity and spending since 2000 has focused mainly on
increasing the supply of hospital services and changing how care is delivered. There
has been less attention to the demand side, with work on personalisation being a
notable exception.

John Seddon, a systems thinker and writer, has emphasised the role of 'failure
demand' in public services - that is, demand that arises from the failure to meet
people's needs in the first place (Seddon 2008). Examples in health care include
people who repeatedly attend hospital emergency departments because they are
unable to access advice from general practices and other sources.

Seddon's thinking is echoed in a more recent authoritative review of the changing
health needs of the population, which concluded that the NHS is focused on
'responding to failures in other areas of policy' (McKee et al 2021). From this
perspective, greater priority should be given to addressing the wider determinants

 

26
The rise and decline of the NHS in England 2000-20

 

of health and the behavioural drivers of disease alongside the biological causes
(Whitty 2017). Cuts in public spending beyond health care between 2010 and 2020
were a barrier to this happening.

Lessons can be learnt from work done under the most recent Labour government
to tackle health inequalities through a combination of the minimum wage, tax and
benefit changes to reduce child poverty, policies to promote full employment,

the Sure Start programme to give children the best possible start in life, and
interventions to improve education, housing and employment (Barr et al 2017). The
cross-government approach made an impact on inequalities but was not sustained
after the 2010 general election.

The establishment of integrated care systems (ICSs) as statutory bodies in July 2022
offers a fresh opportunity to address these issues. Integrated care partnerships
within ICSs provide leadership on population health and they are developing health
strategies for their areas. Their work needs to be matched by leadership within
government and the articulation of a cross-government strategy, as argued by the
NAO (2022) and others. The recently established Office for Health Improvement
and Disparities has a potentially important role in this regard (Warren 2021).

The difficulty facing ICSs is that they have inherited financial challenges built up

by NHS organisations during austerity and as a result, three-quarters of them are

in deficit. As the NAO noted in its review, 'There is a high risk that ICSs will find it
difficult to fulfil the high hopes many stakeholders have for them' (NAO 2022, p 13).
This will undoubtedly constrain the ability of ICSs to increase investment in primary
care, community services and prevention in order to moderate rising demand for
care and relieve pressure on hospitals, especially at a time when hospitals also lack
capacity to meet the demands they are faced with.

Political failure

Taken together, constrained resources, decisions on how resources should be used
within the NHS, and rising demand help to explain the decline of the NHS. Yet just
as important has been the failure of politicians and the political system in which
they operate to heed the warning signs and act accordingly.

The decline in NHS performance was not only predictable, it was actually predicted
(Ham 2014). Various sources - including those drawn on earlier in this paper -
pointed to evidence of deteriorating performance and argued that the health and
care system had reached a point where patient care was being compromised.

 

27
The rise and decline of the NHS in England 2000-20

 

Decline started gradually, but by the middle of the decade, the adverse impacts on
patients and staff were plain to see. It was also clear that austerity would continue
for much longer than the period envisaged when David Nicholson launched QIPP.

The chorus of voices calling on the government to act reached a crescendo.

The winter crisis of 2016/17 was a reminder of the consequences of short-term
thinking geared around election cycles and an unwillingness to deal with long-
term challenges that are not amenable to incremental policy changes. A preference
for adversarial point-scoring rather than cross-party consensus accentuated the
problem. A political system seemingly incapable of tackling the root causes of the
huge pressures on the NHS and social care seemed, to this observer, as great a
concern as the sight of services palpably struggling to deliver acceptable standards
of care (Ham 2017a).

The pre-eminent position of the Treasury in managing the public finances was
important throughout the period under review. Morgan (2022) has described the
consequences for NHS workforce planning, with the Treasury resisting calls to
publish workforce forecasts for fear of losing control over NHS staffing numbers
and costs. Its fears are underpinned by concerns about value for money of the
education and training budget (Morgan 2022).

Public health policy also suffers from short-term thinking and disjointed policy-
making. A recent review cited various examples from the past decade, including
scrapping the alcohol duty escalator and freezing the fuel duty. It concluded that:

These examples... are symptomatic of wider government weaknesses in planning
effectively for the long term and aligning policies across departments. Such
shortcomings can be especially pronounced when addressing complex policy
issues such as obesity that have multiple causes and require coordinated cross-
government responses.

(Everest et al 2022, p 26)

While the coalition government and the Conservative government that took its
place bear most of the responsibility for failing to respond effectively to growing
financial and workforce pressures in the NHS and social care, opposition parties
were also at fault. This was evident at the 2015 general election when none of
the parties offered policies on a scale commensurate with the challenges that had
emerged in the NHS and social care.

Through much of this period, the Labour Party focused on claims that the NHS was
being privatised and its reluctance to promise necessary funding increases reduced

 

28
The rise and decline of the NHS in England 2000-20

 

political competition to ensure adequate resources were available. At the time of
writing, the Labour Party has not committed to funding increases on the scale
needed to tackle current pressures, with the Labour leader Sir Keir Starmer stating
in his 2023 new year speech that 'investment is required... But we won't be able to
spend our way out of their [the Conservative government's] mess' (Starmer 2023).

It is also worth reiterating here that the Lansley reforms to the NHS and,
subsequently, Brexit crowded out opportunities for dealing with other pressing
issues. The Lansley reforms diverted time and attention away from work to improve
NHS performance and resulted in the loss of leaders experienced in dealing with
financial crises. David Cameron later expressed regret that these reforms also
diverted attention from social care (Cameron 2019).

Brexit slowed down work on social care reform, as acknowledged by a minister
leading this work (Cecil 2019). It also increased the challenges of recruiting and
retaining health and care staff from EU countries and created opportunity costs

in the work that went into preparing the NHS for the possibility of a 'no deal'
Brexit. It also put the public finances under further strain. The pandemic did lead to
increased financial support for the NHS and social care, but this was scaled back as
the pandemic eased.

Structural weaknesses in the political system have been compounded since the
Brexit referendum by frequent changes of leadership and divisions in the governing
party. The time horizon for action has shrunk as the challenges of building
coalitions to support reform have increased. The effects are visible not only in
relation to the NHS and social care but also in other areas of public policy, including
housing, energy, infrastructure, education and skills.

 

29
The rise and decline of the NHS in England 2000-20

 

Where next? Renewing the
purpose of the NHS

We have seen how big choices on public spending starting in 2010 were mainly
responsible for the accelerating decline of the NHS in the decade that followed.
Failure to increase NHS funding sufficiently, and to provide adequate resources for
capital investment and developing the workforce of the future, left a lasting legacy.
Neglect of social care and lack of political will to make the fundamental changes
needed to put it on a sustainable long-term path were also consequential.

The implications for the future are clear. If current pressures are to be addressed,
NHS revenue funding should increase in line with the long-term average. Spending
on capital, education and training, and public health must be given priority.

Targets for efficiency savings should be realistic, gaps in social care funding filled,
and fundamental changes to social care funding and provision agreed. A credible
and fully funded workforce plan for the NHS and, ideally, social care should

be published.

The NAO has summarised the position as follows:

Years of short-term funding decisions for the health sector means that resources
have moved away from areas of investment in the future, such as the workforce,
public health and capital. This will need to be rebalanced to ensure that the
ambitions set out in The NHS Long Term Plan are realised. To bring about
lasting stability, the NHS needs a financial restructuring programme not just a
recovery programme.

(NAO 20203, p 12)

The future will be shaped by decisions on these issues and on the ability to moderate
demand for care and support, to invest more in primary care and community services,
and to recognise the role of patients and the public in improving health and care.

The next government must adopt a long-term perspective to avoid repeating the
mistakes of the past decade. The improvements that occurred between 2000 and
2010 show that change is possible where the political will exists.

What then are the prospects for the future?

 

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The rise and decline of the NHS in England 2000-20

 

Spending decisions

Two considerations will influence future spending decisions. The first is that the
share of total public spending accounted for by the NHS has grown considerably
over the past 20 years but economic growth has been slow for some time (Stoye
and Zaranko 2019). It may be difficult for any government to continue the same
trajectory even though health spending in the UK was around 20 per cent lower
per person than in similar European countries between 2010 and 2019 (Rebolledo
and Charlesworth 2022). Recent projections for economic growth, showing the UK
lagging behind other countries and the economy expected to flatline for a number
of years, underline the challenges facing the next government in determining future
funding for the NHS.

The second consideration is that the public remains strongly committed to the NHS
and this will weigh heavily on politicians whatever their persuasion. The inherent
tension between these two considerations explains why recent governments have
sought to control NHS spending until the point is reached where they feel impelled
to loosen the purse strings. But in finding extra resources for the NHS, they have
failed to recognise that sustaining the NHS requires fundamental reform of social
care. Successive governments have also been unwilling to be honest about the
consequences of their spending decisions for patients and the public.

Taking the longer-term view, analysis shows that real-terms spending increases

on the NHS averaged 4.1 per cent compared with plans of 2.7 per cent (Zaranko
2021). This underlines the argument that future spending reviews should be realistic
about the requirements of the NHS to avoid extra funds having to be found to
cover deficits when they arise. Experience shows that public resources are used
most effectively when NHS organisations and their partners are able to plan

how to deploy these resources instead of receiving them at short notice with an
expectation that they will relieve pressures rapidly.

Moderating demand

More resources are necessary but not sufficient. In deciding how these resources
are used, there needs to be a much stronger focus on moderating demand for care.

Specifically, there must be greater investment in primary care and community
services (including social care) and a sustained commitment to prevention, both in
the NHS and through the contribution of other public services. The case for change
has been set out in various policy documents and reports in the past decade,
including the Forward View and the NHS Long Term Plan.

 

31
The rise and decline of the NHS in England 2000-20

 

Despite this, the share of NHS expenditure accounted for by hospitals increased
from 62.7 per cent to 65.2 per cent, and the share accounted for by primary and
community services fell from 20 per cent to 19.4 per cent, between 2015/16 and
2018/19 (NAO 20204, p 37). The government and NHS leaders share responsibility
for rebalancing expenditure.

Examples of many of the service changes that are needed can be found across the
NHS, as in the use of virtual wards and services that reduce hospital admissions
and help people live independently at home for longer. The difficulty is that they
have yet to be adopted on a sufficient scale to bring about the system-wide
transformation required. Investing in capacity to offer alternatives to hospital
remains one of the most urgent requirements (Whitaker 2023). This is illustrated
by reductions in community nursing where staffing levels fell between 2010 and
2015 and have yet to return to those seen in 2010 despite recent increases (Rees
and Hassan 2023, p 22).

Experience in Torbay, Devon - a pioneer of integrated care in the 2000s -
illustrates why strengthening community services should be a priority. NHS and
council leaders in the area chose to increase the provision of intermediate care to
be able to respond rapidly to older people requiring care and support at times of
crisis. They were able to do so because of a commitment to pool NHS and social
care budgets and the ability to use what were nominally NHS funds to provide more
social care. Alignment with general practices was intrinsic to Torbay's approach.

Evaluations showed that these changes led to reductions in the use of hospital beds
by older people and in delayed transfers of care from hospital (Thistlethwaite 2011).
If national policy-makers had acted on the learning from Torbay and increased
staffing in occupational and physiotherapy, community nursing and social care,
demand on hospitals across England might have been manageable. Long-term
reductions in NHS hospital beds, and much lower numbers of hospital beds in
relation to the population served than in many other countries, means that the

NHS is often working at or beyond available capacity. This reinforces the case for
investing in alternatives to hospitals.

Doing so is even more important at a time when the changing burden of disease
requires a reorientation in which general practices work ever more closely with
other services to offer care in people's homes or close to home. The new care
models proposed in the Forward View sought to move in this direction but

their development was slowed as funds intended to support them were used to

 

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tackle deficits in existing services. With transformation taking second place to
sustainability, an opportunity was lost to align the supply of care with changes
in demand.

Thinking through how resources are used also means giving greater recognition to
overtreatment and overdiagnosis - for example, in care at the end of life, when
resources may be used on interventions that offer little if any benefit to the
individual (Haslam 2022). Initiatives in Scotland on 'realistic medicine' and in Wales
on 'prudent health care' are examples of how these ideas have started to gain
traction. Supporting people to use services wisely through initiatives such as shared
decision-making and supported self-care is essential if scarce resources are to

have the desired impact.

Sharing responsibility with patients and the public

Patients and the public must also be fully engaged in improving health and care,
as Wanless argued in 2002. Research showing that patients who are most able to
manage their health conditions have fewer emergency hospital admissions and
A&E attendances than those who are less able to do so demonstrates why this is
important (Deeny et al 2018). Enhanced primary care as part of a compassionate
communities intervention in Frome, in Somerset, led by a general practice showed
similar results (Abel et al 2018).

Changing the relationship between people and those who care for them is essential
if people are to become active agents in their care, with responsibilities as well as
rights. This means enhancing people's capabilities to make informed decisions
building on examples of where this already happens (Ham et al 2018). Care providers
as well as patients must be willing to work differently to ensure that patients'
preferences are taken into account (Mulley et al 2012). Support should be tailored to
the needs of different individuals and communities.

Moving in this direction means learning from the work of Hilary Cottam and
asset-based community development. Cottam (2018) argues that public services
should work with people, not do things to them, and should draw on a wide range
of assets in improving outcomes. Her insights are especially relevant at a time
when long-term conditions represent a growing proportion of need and demand,
and where there is evidence of the benefits that result when people with these
conditions are supported to take greater responsibility for managing them (Coulter
et al 2013).

 

33
The rise and decline of the NHS in England 2000-20

 

Cottam summarises her argument as follows:

The challenges we face today - whether new challenges like chronic disease or
older challenges that have taken on new form, such as finding good work - are
long-term and continuous. These are not one-off events that can be cured by an
expert or a process that is done to us. What is common to these modern problems
is that the solutions require our participation. Whether we think about diabetes

or climate change, good ageing or good education, we have to be active agents of
change. Solutions require us - communities, the state, business and citizens - to
work together, drawing on new ideas and above all on each other to create change.
(Cottam 2018, pp 32-33)

Areas like Wigan that have adopted such an approach have shown that it is possible
to improve population health by working with a range of agencies and engaging
local people (Naylor and Wellings 2019).

As this happens, the goal should be to promote shared responsibility for health

and wellbeing. Shared responsibility is quite different from personal responsibility,
which has been criticised for not recognising that people's behaviours are
influenced by the environment in which they live and work. Government must
create the conditions in which people can thrive through regulation, taxation,
legislation and other means, and this should go hand-in-hand with work to support
people to play their part more effectively. Changes in behaviour and interventionist
approaches are two sides of the same coin.

Crucially, there must be recognition - as Don Berwick has argued in the United
States context - that claims to increase health care spending may result in 'the
confiscation by health care of opportunities for growth and success in other sectors'
(Berwick 2014). Placing 'improving health' at the heart of the purpose of the NHS

is essential to secure its future as part of a cross-government strategy drawing on
the work of Michael Marmot and others (Marmot et al 2020). Allocating scarce public
resources to services and interventions that will achieve this aim - for example, in
the early years - must be the priority.

 

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Acknowledgements

| had two motivations in writing this report. The first was to set out to chart the
decline of the NHS between 2010 and 2020, drawing on various sources from
The King's Fund and other organisations. The second was to identify lessons for
politicians and policy-makers facing the challenge of deciding what to do next.

| sought comments from a number of those involved in senior leadership roles
during that period, some of whom prefer to remain anonymous.

I am grateful for comments on earlier drafts from John Appleby, Richard Douglas,
Chris Hopson, Richard Humphries, David Nicholson, Simon Stevens and Nick
Timmins. At The King's Fund | received valuable feedback from Siva Anandaciva,
Alex Baylis, Richard Murray and Sally Warren. | alone am responsible for any errors
or omissions.

 

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The rise and decline of the NHS in England 2000-20

 

About the author

Chris Ham is Co-Chair of the NHS Assembly, emeritus professor of health policy
and management at the University of Birmingham, visiting professor at the London
School of Hygiene & Tropical Medicine and Senior Visiting Fellow at The King's
Fund where he was Chief Executive between 2010 and 2018. He is a member of
the board of New Local, a member of the Bevan Commission and an adviser to
Carnall Farrar.

Chris has authored more than 20 books and numerous articles on health policy
and management. During his career, he has worked at the universities of Leeds,
Bristol and Birmingham, from where he was seconded to the Department of Health
to work as the Director of the Strategy Unit between 2000 and 2004. He works

at the interface between research and policy, drawing on evidence to inform
decision-making.

From 2019 to 2021, Chris was chair of the Coventry and Warwickshire
Integrated Care System and non-executive director of the Royal Free London
NHS Foundation Trust.

Chris has advised the World Bank and the World Health Organization, as well as
the governments of New Zealand and Sweden. He has served as an adviser in the
UK to the Audit Commission, the House of Commons Health Committee and the
National Audit Office.

He has also been a board member of the Canadian Health Services Research
Foundation and the Canadian Institutes of Health Research. He was visiting
professor at the University of Toronto in 2019.

He is a founding fellow of the Academy of Medical Sciences, a fellow of the Royal
Society of Medicine and a former vice-president of the Patients Association.

Chris was awarded a CBE for his services to the NHS in 2004 and a knighthood

for services to health policy and management in 2018. He was made an honorary
fellow of the Royal College of Physicians of London in 2004 and an honorary fellow
of the Royal College of General Practitioners in 2008. He became a companion of
the Institute of Healthcare Management in 2006.

 

46
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