NHS Productivity Sees Tentative Signs of Improvement Amid Labour Government's Reforms

LONDON - The National Health Service (NHS), which had suffered significant decline in productivity after the COVID-19 pandemic, is showing signs of improvement, according to a recent report from the Institute for Fiscal Studies (IFS).

The IFS study revealed that growth in hospital activity far outpaced increases in staffing over the past year. This suggests that new workers are being utilized effectively, albeit not yet addressing treatment waiting lists.

Restoring the NHS is one of the five key missions of Prime Minister Keir Starmer's Labour government, which won a landslide election in July. To achieve this goal, Finance Minister Rachel Reeves announced significant tax increases, spending hikes, and borrowing to repair public services, with 80% of Britons believing these services are in a poor state.

While acknowledging the positive news, Olly Harvey-Rich, research economist at the IFS, cautioned that NHS productivity remains below pre-pandemic levels. "This is welcome news, particularly as we enter winter," he said.

According to the report, there were 3.6% more consultants and 6.4% more nurses in NHS England between January and July compared to the previous year. Notably, growth in services such as elective admissions (up by 10.3%) and outpatient appointments (rising by 9.2%) far exceeded staff additions.

The IFS noted that overall public sector productivity, mainly reliant on healthcare and education, has stood at around 3% below its level in 1997.

Earlier this year, NHS England attributed the decline in productivity to factors such as strikes, temporary staffing costs, shifting patient needs, and previous real-terms cuts to healthcare investment that compromised the resilience of the service.