Scotland needs to up NHS staffing and spending - or live with a poorer health service

Get Scotland’s NHS workforce plan wrong and we will suffer, writes John McLaren.

Current Scottish NHS workforce assumptions are unrealistic going on unsustainable - that’s the main takeaway from the latest Scottish Budget analysis published by the Institute for Fiscal Studies (IFS).

In a series of drip fed pre-releases prior to full publication today (22nd), the IFS outlines a number of worrying budget trends and prospects that should cause the Scottish Government to think long and hard about its next medium term assessment.

On health, the IFS’s conclusions are stark. First, Scotland’s spending advantage over England has been eroded away, falling from 22 per cent per head at the outset of devolution to equality by 2022-23. As a result, while both health budgets have risen, there has been more growth in NHS staff in England than in Scotland over the past decade, although both systems have suffered from declining productivity. In terms of ‘performance’, the evidence is mixed, with the relative worsening of waiting lists and times a common feature but varying across different measures between the two nations, with neither performing clearly better.

The budget analysis for the NHS in Scotland is particularly bleak, writes John McLaren, with it essential that more money, particularly on staffing, must be spent. PIC: Jeff Moore/PA Wire

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The real sting in the tail though comes when looking at future prospects. Plans for the Scottish workforce, announced in 2022, assume only a one per cent increase over five years and the last Health Cabinet Secretary, Michael Matheson, recently confirmed he did “not anticipate any significant workforce growth over the medium term”. In contrast, plans for the English NHS workforce imply a 20 per cent increase over the same period.

Such a future staffing differential seems highly implausible and it is the Scottish one that lacks credibility. The IFS conclude that “Scotland is likely to need to either up its planned increases in staffing and spending, find ways to boost productivity significantly faster than is being planned in England, or live with a relative deterioration in NHS service quality.”

Fortunately, for whoever is making budget decisions further down the road, Scotland will receive Barnett consequential’s in relation to the English staff uplifts. However, questions remain. Uppermost is - will the Scottish Government assign these uplifts to the NHS or to alternative spending areas, like education or social security?

In wider terms, planning based on known staffing levels for some years ahead, as with the English approach, should result in better results for NHS Scotland than only knowing what staffing levels are affordable a year or two in advance. While the Scottish Government might be forgiven for not focussing too hard on economic issues, given that many related powers are retained at Westminster, when it comes to planning for the NHS and its workforce then there is no such excuse.

And if any area is crying out for indicative long term staffing and funding plans then it is surely health. The size of the budget, the length of time it takes to train new staff, and the accompanying capital needed to give the staff the means to carry out their work efficiently and effectively, all point to the need for such long term planning. Coming off the back of the pandemic and lengthening waiting times, that need is even greater.

For England, the UK Government commissioned the NHS to come up with the first long-term workforce plan, which was published in June 2023, all 151 pages of it. At present - it is to be updated every two years - the plan aims to increase staff by around 60 per cent by 2036, an annual increase of over three per cent a year, requiring an average real terms spending increase of 3.6 per cent per year. As described above, this is miles away from current Scottish ‘plans’, based on the ‘National Workforce Strategy for Health and Social Care’ from 2022.

In all likelihood a new analysis will need to be undertaken, one that incorporates the modelling work done for the English NHS and also takes into account relevant factors, like Scotland having a slower growing population but a faster ageing one. NHS Scotland's needs might therefore be greater or smaller, or it may decide to go in a different, more preventative, direction. Regardless, as the OECD pointed out earlier in analysis from this year, “health spending is projected to outstrip both expected growth in the overall economy and in government revenues across OECD countries. In addition, the pandemic highlighted the need for smarter spending to strengthen health systems resilience and to provide countries with the agility to respond to shocks”. They conclude that ‘urgent action’ is needed to ensure the fiscal sustainability of health systems.

The health position also has severe implications for other budgets. For example, based on current plans, the IFS estimate that if health funding was to increase by 3.3 per cent a year in real terms - providing the same increase per person in Scotland as IFS estimate is needed to meet the NHS’s long-term staffing plan in England - and core funding for Local Government was to increase by one per cent a year, then ‘other’ public service budgets would experience a fall of over 12 per cent by 2028-29. Given that such ‘other’ budgets include economic support and law and order, this seems like a big ask.

Reminders abound over the need to sort this situation out. Only last weekend key figures in the Scottish healthcare system outlined their strong concerns to the Scotsman, in particular over staffing levels and the lack of future planning. Plans to build new hospitals and treatment centres have been put on pause. Meanwhile, the ITV drama ‘Breathtaking’ drives home the deadly consequences of not being properly prepared.

What better time for the new Health secretary, Neil Gray, to make a positive first impression by rapidly pulling together a long term workforce plan. Without one he will be stumbling around in the dark for years to come.

John McLaren is a political economist who has worked in the Treasury, the Scottish Office and for a variety of economic think tanks.