Financial implications of the NHS Long Term Workforce Plan

Earlier this year the government launched the NHS Long Term Workforce Plan – the first comprehensive workforce plan for the NHS. It predicted that unless action is taken, there will be a shortfall of between 260,000 to 360,000 staff by 2036/37. To combat this, the workforce plan aims to increase employee numbers through three main avenues – Train, Retain and Reform.  

The plan is an ambitious one – but what do we know about the financial implications of putting that ambition into practice so far? 

The Institute of Fiscal Studies (IFS) released their assessment in August 2023 (Implications of the NHS workforce plan). Some of the implications that we’ve picked out of the report are: 

1. Funding the plan will require NHS spending in England to increase by around 2% of national income over 15 years, equivalent to around £50 billion in today’s terms.  
2. The plan includes funding for new training places but does not estimate nor provide for the longer-term increases in funding that will be required to cover the salaries – and other costs – of an expanded workforce.  
3. To attract and retain more workers, it seems likely that NHS pay will need to keep pace with earnings in the wider economy. The IFS estimates that this implies real terms increases in the NHS wage bill of around 4.4% per year.  
4. The objective of retention efforts of the plan is to reduce the annual NHS-wide leaver rate from 9.1% to between 7.4% – 8.2% – a target dubbed as ‘a stretching but realistic trajectory’. 
5. Under the ‘reform’ aspect of the plan, it aims to increase productivity, and based on an ‘ambitious’ assumption that labour productivity will increase by between 1.5% and 2% per year. For context, the Office for National Statistics estimates that (quality-adjusted) productivity in the NHS increased by an average 0.8% per year between 1995–96 (when the data series starts) and 2019–20, and 1.2% per year between 2009–10 and 2019–20). 

On a national scale this can seem quite daunting, but what does this mean for Integrated Care Systems (ICSs), Primary Care Networks (PCNs). Integrated Care Boards (ICBs), NHS Trusts, hospital departments and any other number of localised workforces when they come to planning the future? We asked the Skills for Health expert, Theresa Gatfield, to provide their top 3 pieces of advice for anybody worrying about the financial implications of the NHS Long Term Workforce Plan.  

Realism and creativity have to be a central part of your workforce planning 

“We make sure that when organisations are thinking about workforce planning that they assess and produce realistic targets, not just ambitious ones. The whole point of effective workforce planning is that it is something achievable and something that will meet the needs of the populations they will serve.  

You must strength test and question your ambitions. If during the process you understand that your needs are not achievable – think about  what other factors are stopping you from being able to meet a staffing level that you need. Those factors are inherent considerations of workforce planning that also need to be worked on and are often not seen to be within the realm of workforce planning.  

You should also think about how else you can solve gaps creatively. To meet ambitious targets, the NHS will have to work differently and not just recruit to the same roles and staffing models. You can look to the future and acknowledge technological advances, and consider how they will shape the roles and the skills required to deliver on service provision.  

The other aspect of this is that what looks realistic to your situation might not match the NHS Long Term Workforce Plan or the IFS findings. If you have, for example, a 15% leaver rate above the average for the NHS-wide workforce, then halving that might not be a realistic target over the course of your workforce planning. You should focus on the direction of travel – a reduction in the leaver rate – at what is a reasonable level for you when you take into consideration all the other dependencies.” 

Theresa Gatfield, Senior Consultant for Workforce Planning, Skills for Health 

If your workforce plan isn’t a strategic consideration for leadership, then it will need to be  

“Part of that realism is understanding that you might not be able to control everything in the system that is affecting your workforce planning.  

This is where collaboration is key. Workforce planning needs to be on the agenda for all levels of leadership – it needs to be informed by them, and they need to be informed by it.  

We see strategic level collaboration really helping when it comes to Integrated Care Systems. We regularly work with ICSs and ICBs to provide training on the Six Steps Methodology to Integrated Workforce Planning®, and for some it’s the first time they’ve gotten into a room and uncovered the system-wide challenges that they need to collectively work on.  

To achieve the ambitious targets in the NHS Long Term Workforce Plan, this will need to become the everyday process for healthcare systems.” 

Theresa Gatfield, Senior Consultant for Workforce Planning, Skills for Health 

You don’t have to be scared by the finances to take them into account 

“Finances are, of course, a central part of workforce planning – but they are only one part of a larger picture. With NHS funding being an incredibly high-profile issue in the UK, it can be easy to worry about it. 

However, we advise people to dig under the skin of the challenges they face based on the workforce they need to create. Funding doesn’t fix everything – there are so often system transformations that achieve more for your workforce plan than more staff funding would. Reducing inefficiencies, being creative and innovative in your patient flows, improving collaboration and staff wellbeing – these things can be game-changers.  

Whilst funding may dictate what you can do to solve the challenges you face, they don’t dictate whether you will be able to face them or not.” 

Theresa Gatfield, Senior Consultant for Workforce Planning, Skills for Health 

Skills for Health are leading workforce development experts. We have worked with most NHS trusts and healthcare organisations in the UK to develop, create and manage workforce plans using our nationally recognised Six Steps Methodology to Integrated Workforce Planning®. Get in touch today to find out more about our services.