The surprisingly decisive victory of the Conservative Party should, on the surface, mean more of the same for the NHS. But what does that really mean? Matt Custance explains...
I think there are four main areas to think about: Brexit, NHS management, NHS performance and funding, and the NHS capital budget.
How the NHS is impacted by Brexit
As Alastair McLellan, editor of the Health Service Journal, noted in his editorial yesterday: “Not one authoritative independent body has suggested that leaving the EU – especially without extensive arrangements in place for cooperation – is anything other than negative for the NHS.” The election of a Conservative government with a thumping majority means it is certain we will leave, under the Withdrawal Agreement negotiated by this government.
That will mean that the workforce crisis is likely to get worse. In the final days of the campaign, Boris Johnson reiterated his determination to reduce immigration while also promising NHS visas. Even with exceptions made for the NHS, we have already seen that the mere threat of Brexit has made people (particularly Europeans) less likely to come. We can also assume that it will be harder to recruit management internationally and that the social care workforce, on which the NHS relies, will be under further pressure. That will cause operational problems, potentially impact patient safety and likely increase staffing costs, either through pay rises to attract staff or via increased use of agency.
Pressure on immigration will also likely send construction cost inflation skywards, making the cost of the 40 new hospitals increase.
Research is likely to be impacted negatively. Already we see stories regularly of the so-called “hostile environment” excluding immigrant researchers. But more worrying has been the failure of the UK to continue to secure research funds. If Brexit makes it harder to secure research funds and to perform effective research between jurisdictions, this will erode a key funding source for the NHS and make it harder to attract top talent.
Meanwhile, the cost of imported goods and services will likely rise somewhat, with a combination of currency fluctuation, customs administration costs and the cost of goods from places like Japan where we rely on existing EU trade agreements.
How the NHS will be managed
We can expect the Conservative government to continue to rely heavily on NHS England/Improvement to lead the system and to advocate for it. This means the package of legislation put forward by NHSE/I is likely to be passed, resulting in further dilution of the internal market and a continuation of the consolidation of the system, within sustainability and transformation partnership (STPs), regions and nationally. Assuming Matt Hancock retains his role as Health Secretary, we can also see continued advocacy for a greater role for technology.
Impact on NHS performance and funding
NHS performance issues are not going to go away. They are rooted in deep problems related to rising demand, a delivery model which everybody seems to be trying to change (and mostly failing to change) and the workforce shortage. In the short term, the easiest answer to deliver is more money. The Conservatives have already done this with a commitment to 3.1% real terms funding increase each year – more than most expected them to. It won’t be enough but that’s been the case for over 10 years. The big question for me is whether, as some commentators were arguing, Johnson will now pivot to the centre, to try to keep the Leave/Labour voters that he has won, post Brexit. If he does, even more funding for the NHS would be a good place to start.
The Conservatives have also committed to increase spending on social care by £500 million by 2024. That probably won’t be enough to offset demand pressures and wage costs, given the pressure on workforce, so we should expect to continue to see social care struggling to keep up with the demands from the NHS.
NHS capital spend
The Conservative Party’s “40 new hospitals” pledge probably played very well in this election. The electorate may not trust the Conservative Party with the NHS but maybe they do trust them on infrastructure and capital. This commitment is likely impossible for the government to walk away from, even if Brexit’s effect on the economy pushes the government into another form of austerity.
As I have said in other pieces (here and here), the substantial boost in government-funded capital for hospitals is offset to some degree by the virtually complete abolition of access to private capital. If the government finds itself pressed for cash, it will be interesting to see whether it decides to reopen access to mechanisms such as private finance initiatives (PFI.
The Conservative majority has won by gaining seats in towns in Wales, the Midlands and the north of England, constituencies that have been held by Labour for generations. To retain these seats at the next election, the government will need to address the issues people face in these communities. The design and distribution of new regional funds (including a new national 'Prosperity Fund’) may be affected. We can expect an immediate focus on infrastructure in the Midlands and the North England, as well as increased spending on public services and investment (or trade protection) of industries in these areas.
For further information on this topic, contact Matt Custance.