News

Be careful what you wish for

Martin Turner, former chief executive at Gwent Healthcare NHS Trust and Fellow of the Association of Chartered Certified Accountants, reflects on the recent vote to leave the European Union.

So the pundits were wrong; the remain campaign were wrong: the financial markets were wrong; the bookies were wrong and even the leave campaign were wrong!

The UK is going to leave the EU. Well, not right now – but certainly within the next few years. So what will this mean to the NHS?

As I write this, just a few short weeks after the momentous decision, the financial markets are in turmoil, the prime minister has resigned and is to be replaced by Theresa May, while the leader of the Opposition is refusing to do the same despite almost the entirety of his parliamentary party deserting him. It is safe to say that politically and economically, our country is in unchartered territory.

All this, and starting the exit process under Article 50 has yet to even begin. And when it does eventually happen we are told that it will take at least two years before the UK fully loses its status as a member of the European Union.

What about the money?

When we consider what all this means for the NHS, a couple of areas are worth considering as a priority. First and foremost, as it always is, money is top of the list. Specifically, will the NHS get more in the future?

Official figures released on Friday 20 May 2016 by NHS Improvement showed that NHS trusts in England had ended the 2015-16 financial year £2.45bn in deficit; roughly three times bigger than its budget overspend from a year earlier.

Rising demand for care from a growing and ageing population is straining hospitals and NHS services like never before. It is overwhelming the modest real-terms budget increases allocated by the government even before they arrive. There is no doubt that there will be significant further pressure on the NHS and its finances.

In 2015, the UK government paid £13bn to the EU budget; the EU spending in the UK was £4.5bn; so the net contribution was £8.5bn. Each of the four countries of the UK has a publicly-funded health care system. Taken together, the 2015-16 combined budget is £136.7bn. If we assume that all of the “saving” on the net contribution of £8.5bn is put into the NHS then this would represent a substantial increase in the NHS budget. But wait… will there be an economic impact of leaving the EU? Will there be a downturn in the UK economy? Will we experience inflationary pressures as a consequence of leaving?

The economy of the UK will have the biggest impact on the ability of the government to allocate monies to the public sector. It’s hard to predict what will happen – but let’s be optimistic and assume that things may slow down, but nothing worse. So, I believe that they will need to put their money (or our money to be more accurate) where their mouth is and add something extra to the NHS pot. Realistically, we probably won’t see £8.5bn but maybe, just maybe, we can hope for half of that.

NHS staffing

Second after money, and inextricably linked to it – NHS staffing. Will leaving the EU create further staffing problems in the NHS?

Approximately 1.6 million people work in the NHS. Of this number 1.2 million work in the NHS in England, and 55,000 of these staff are from other EU countries, according to the NHS’s electronic staff record for September 2015. If we assume the same ratio in Wales, Scotland and Northern Ireland, then we can estimate that around 73,000 staff working in the UK NHS are from other EU countries.

Recruitment is not easy now. English providers spent an estimated £3.7bn on locum doctors, nurses and other staff in 2015-16. It is estimated that agency staff cost double what is paid to equivalent staff employed in the NHS. Given the pressure on finances in the NHS it is clear that such costs need to be kept to an absolute minimum. The NHS will want, and indeed need, to employ staff from other countries for the foreseeable future.

Leaving the EU may result in the end of free movement of migrant workers. There have also been worrying reports of racism during and after the referendum campaign. Whilst I firmly believe that the UK is a tolerant and welcoming society we will need to overcome these extremist views. Not just for the good of our society, but for our public services too.

However, I also believe that leaving the EU could exacerbate the staffing situation – particularly in the short term. Existing staff from other EU countries need reassurance about their future in the UK. Also, the NHS will need to start planning now to ensure that it addresses the potential staffing shortfall that could materialize over the next few years.

The NHS is a service provided to people by people. Around 80% of all it spends is on staff. Therefore, having the right staff is crucial to its operation. If I were still a chief executive of an NHS health trust I would add this to my risk register, low likelihood but high impact.

So in conclusion, the NHS may get more resources as a result of the UK exit from the EU but unless it has the trained staff to employ, those resources will be wasted.

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