Can the NHS meet its 2% productivity challenge? Here’s what experts think
About 5 mins
Improving NHS productivity is a central focus of current health policy. Recent government funding increases for the NHS in England have been granted under the condition of meeting an ambitious target of 2% annual productivity growth to the end of this parliament (2028/29), aiming to stretch constrained budgets further.
The NHS’s productivity trajectory shapes the amount of care that can be delivered with the resources available. It therefore determines the future resourcing needed to achieve particular goals, such as those set out in the recent 10-Year Health Plan. But historical data alone can’t predict the future productivity path, making it difficult to plan for staffing, funding and infrastructure.
To explore possible future productivity, we partnered with specialist NHS internal consultancy The Strategy Unit to run an expert ‘elicitation workshop’ – a structured method for gathering informed judgement in areas of uncertainty. We assembled 14 subject matter experts from clinical, policy and research backgrounds to forecast NHS productivity growth over the next decade.
We gathered 14 experts, drawn from research, policy and frontline NHS services. They provided estimates for both the short term (0-5 years) and longer term (6-10 years), along with their reasoning.
First, we asked experts to consider a ‘momentum’ scenario: what would happen if the NHS were to continue its current trajectory, helping us build a credible picture of what the future may hold. We also explored a second, more optimistic scenario in which the NHS receives the necessary funding, investment and support to develop a highly technology-enabled system.
For this exercise we used ‘non-quality-adjusted’ productivity, an accredited measure from the Office for National Statistics (ONS). Though this doesn’t account for quality improvements, its consistent use over time allows us to examine productivity growth over the past 30 years and it’s the indicator that we expect to align most closely with the NHS productivity target. A recent review of this statistic proposed some changes to the methodology; we encouraged participants to allow for this in their estimates.
Can the NHS meet its productivity challenge?
Our 14 experts forecasted what they thought would happen based on their understanding of current trends (our ‘momentum’ scenario). Each expert was asked to give a ‘low’ and a ‘high’ estimate for the productivity growth rate, to show the range they thought it would likely fall within. There was considerable variation by individual, but we also report the group average.
The experts’ combined central estimate of annual productivity growth over the next 5 years was 0.7% per year, far below the target of 2%. The combined group estimate was higher over the longer term (6–10 years), reaching 1.4%. Over the full decade, forecasts ranged from -0.7% to 2.7%, with a group average of 1.0%.
While this suggests some optimism, it also highlights challenges ahead: experts’ estimates equate to only a 15% chance of delivering 2% annual productivity growth, in line with the government’s target, over the short term.
Figure 1
What might drive up or hold back productivity?
Experts also told us what the critical enablers and barriers for NHS productivity growth would be. Some examples cited by experts are included in Figure 2.
Figure 2
Technology as an enabler of productivity
We also explored a scenario in which the NHS receives the necessary funding, investment and support to develop a highly technology-enabled system. In this scenario, the productivity growth forecasted by experts ranged from 0.0% to 5.0% over the next decade, with a mean of 2.2%.
This suggests that, with the right supportive conditions, the NHS could reach or even exceed 2% annual productivity growth. Experts’ optimism varied substantially, though, and they said this relied on a change in approach compared with previous digitisation efforts. Importantly, achieving this would require more than just additional money, but widespread cultural change, investment in skills and transformation in operating models as well.
Figure 3
What do the latest data tell us?
In a sign of its growing significance to policy, NHS England and the Department of Health and Social Care (DHSC) now more regularly monitor and share productivity data, publishing regular updates on acute hospital productivity, with plans to expand this to other trust types. NHS England reported a 2.7% increase in acute hospital productivity for 2024/25 (April to March), suggesting continued progress in recovering from the productivity shock following COVID-19.
However, this is only for acute trusts, not the whole NHS, and the real challenge will be in sustaining these improvements to the end of the parliament and beyond. Health Foundation analysis of hospital activity and workforce data suggest this could be challenging (Figure 4). Despite rapid growth in hospital care in 2024 and into 2025, progress has slowed sharply in recent months. Further analysis reveals weakening growth across all components of care, with the fastest fall in emergency inpatient care. Staffing growth has slowed too, but not to the same degree. Taken together, this paints a picture of cooling acute productivity growth.
Figure 4
Looking ahead
Sustained productivity growth is essential to a high-quality, sustainable health system. Our elicitation exercise highlights the opportunities and challenges ahead, but acting on them will require a cohesive plan. That’s why the Health Foundation has launched the NHS Productivity Commission – to identify practical, system-wide solutions for sustainable productivity growth over the next decade. The Commission is gathering input, including via an upcoming call for evidence, and will publish its final report in autumn 2026, setting out a package of reforms to boost NHS productivity.