How evidence-based policy can transform the NHS and social care

Health and care under the new government 

As the new government gears up for a crucial October budget, followed by a spending review and a new 10-year plan for the NHS next year, policymakers are confronted with the formidable challenge of steering a health service facing multiple crises. The NHS plan will aim to set a strategic direction for the health service and will draw on insights from the Darzi review, which laid bare the huge challenges facing the NHS and provided a blueprint for reform. 

Darzi’s report highlights how a decade of underinvestment and policy failure left the NHS in a dire state, which was then exacerbated by the pandemic. It also points to a myriad of other pressures on the NHS, not least from an ageing population and rising chronic disease. Cuts to local public health budgets, political neglect of social care and weak investment in wider public services are cited as contributing to the nation’s worsening health. As the Darzi review focuses mainly on the NHS, we’re awaiting how the government will address the crisis in the social care sector, which is in desperate need of investment and reform, as highlighted in our analysis published this month.

The REAL Centre’s role

How much funding will the NHS need over the next decade?

In the summer, our NHS funding projections analysis emphasised just how much NHS funding will need to grow over the next decade to maintain current service levels and meet rising demand. This analysis will help to inform the tough decisions and trade-offs government will have to face in the upcoming budget and spending review. 

Capital investment in the NHS has been particularly low over the past decade, as echoed in the Darzi review, with budgets often used to prop up day-to-day spending. This has resulted in a significant maintenance backlog in the NHS, estimated at £11.6bn in 2022/23. This has in turn caused inefficiencies, lowering capital stocks in the NHS and impacting long-term activity. A sustainable health service requires sustained capital investment. This will require attention in the spending review.

The social care funding picture

Alongside the NHS, social care also faces significant funding challenges in the years ahead. Social care has long faced demand pressures from an ageing population, the growing prevalence of disabilities and increasing care costs. But funding has not kept pace with these pressures. Our recent analysis on social care funding shows that after adjusting for age, spending per person on social care in 2024/25 is estimated to be 5% lower in real terms than in 2009/10. Elsewhere, we’ve also discussed the impact of inadequate and piecemeal funding on social care. The upcoming spending review offers a prime opportunity to address this neglect and better match funding with the growing needs of our population, ensuring a resilient, effective and sustainable social care system for the future. 

Measuring productivity

Another fundamental question facing the NHS is how to tackle the issue of low productivity. This is challenging to answer due to a lack of available data and issues around measurement. Productivity measures how efficiently and effectively resources are combined to produce output. In the NHS, output is the production of population health, which is fundamentally hard to measure. To address these gaps in measurement, we have commissioned work to improve current measures and explore new ways of measuring productivity in health care. This is due to start in September. 

We are also studying variation in productivity across organisations and regions to better understand its underlying drivers. Additionally, drawing on our commissioned evidence and other research, we published a set of five priorities for the new government to consider to improve productivity.

Workforce projections and policy proposals

An update to our earlier workforce projections work is well underway. We are looking at the feasibility of the ambitions of the NHS Long-term Workforce Plan published in 2023 and conducting a deep dive into the nursing workforce using our nurse supply model. Our updated work will set out our projections for workforce shortages and explore the extent to which interventions such as technology adoption, new roles and working conditions can plug the gap.

Expanding the NHS workforce at the scale planned in the Long-term Workforce Plan may have an adverse impact on the workforce for social care. The King’s Speech introduced an Employment Rights Bill aimed at ‘making work pay’ for the most vulnerable workers. Insufficient government funding and oversight, as well as poor commissioning and employment practices, contribute to the illegal underpayment of wages in social care. Our piece on social care pay considers a set of policy options to improve pay for social care workers.

Looking ahead

Finally, the REAL Research Units programme at the University of York and the University of Oxford, part of our efforts to embed economics thinking into health and care policymaking, have been progressing their plans to deliver frontier research on health and care from next year.

Our ongoing portfolio of work aims to build a robust evidence base that supports effective policymaking on the critical challenges facing health and care, especially in these highly challenging and uncertain times.