News / Workforce is number one finance risk (HFMA 2016)

Speaking during a panel session, Anita Charlesworth, director of research and economics at the Health Foundation, told the conference that restraint in nationally set pay rates would deliver about a quarter of the £22bn productivity improvement estimated to be needed by the NHS by 2020/21.

But she said restraint over the past five years had seen pay rises well below the level of inflation through the period, with further Brexit-related increases in inflation widely predicted. ‘Part of the impact has been agency,’ she said. Her implication was that some staff have left the NHS creating more demand for temporary staff and some staff are choosing to leave permanent positions in favour of better paid agency roles.

But she said the challenge went beyond money. ‘It is not just about pay,’ she said. ‘Your ability to engage your workforce becomes ever more critical. I would say that the engagement of your workforce and the morale of your workforce is the number one finance risk facing organisations.’

Nigel Edwards, chief executive of the Nuffield Trust, speaking in the same panel session, agreed. ‘The workforce problem is as big as the finance problem facing the NHS at the moment,’ he said. While he said that cutting training budgets had been ‘not so clever’, he thought sustainability and transformation plans could do better – with strategies needed on how to deal with shortages in key areas.

More encouragingly he said the NHS was seeing ‘more combined approaches to workforce development’ including joint recruitment, joint banks and ambitious plans to open new medical schools.

Both speakers painted a bleak picture of current NHS finances with little prospect of additional funding in the short-term. ‘If it feels hard, it is because it is,’ said Ms Charlesworth. She said the NHS had a ‘good story’ to tell on improving productivity in recent years, ahead of ‘woeful’ whole economy productivity since 2008. However she said ‘the ask was even greater’.

Health Service Journal editor Alistair McLellan warned delegates that the new government had made it clear that, while the NHS was always important, its major priorities lay elsewhere. ‘There are four cabinet committees – inequality, security, Brexit and the economy – and they are the government priorities set out for you,’ he said.

He suggested that behind this attitude were Treasury concerns about the NHS. ‘It is unfair to say it, but there is a belief elsewhere in central government and the public sector that the NHS is playing at deficit reduction,’ he said.

However Mr McLellan said that he was encouraged by some of the real improvement work underway in the NHS. ‘There is more service redesign and efficiency work that is going in the right way, coming from the right point and beginning to achieve the right results than at any time since I became editor in 2002,’ he said.

Mr Edwards said that local organisations, leaders and staff needed to be given the data, time and support to effect change. This rather than nationally led initiatives would deliver the required transformation. ‘I’m optimistic about the potential for local leaders to do something interesting in their own patch,’ he said.