Brexit and the end of the transition period
What does it mean for the health and care system?
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The United Kingdom’s (UK) vote to leave the European Union (EU) in June 2016 triggered three and a half years of complex, wide-ranging and often tense negotiations. The first phase of these negotiations concluded in October 2019 when both sides agreed, and later ratified, a Withdrawal Agreement.
The Withdrawal Agreement saw the UK formally leave the EU on 31 January 2020 and begin an 11-month transition period. During this time the UK adhered to EU rules and remained a member of the single market and customs union, while negotiating a new long-term trading relationship with the EU.
Accordingly, a new EU-UK trade and co-operation deal was agreed on Christmas Eve 2020, to take effect from 1 January 2021.
While the new agreement provides some welcome certainty, effectively removing the prospect of an immediate ‘no-deal’ cliff edge, it does introduce a wide range of changes that will have implications for health and care organisations, the public, and manufacturers of medicines and medical devices as well as the scientific research community, both now and in years to come.
This long read sets out the key changes for the health and care system and what their immediate, as well as potential long-term, implications might be.
People
Workforce and immigration
1. Immigration: the health and care system’s international workforce
Leaving the EU’s single market means that there will no longer be free movement of labour between the UK and European Economic Area (EEA) countries.
As it stands, 13.1 per cent of staff working in the NHS have a non-British nationality – 5.6 per cent are from EEA countries and 7.5 per cent are from non-EEA countries. In adult social care 16 per cent of the workforce is non-British – 7 per cent are from EEA countries and 9 per cent are from non-EEA countries.
These figures have shifted over time and their make-up has changed. For example, in key roles like nursing the number of non-British workers has gone up overall in recent years, but the number of nurses arriving from the EEA has decreased rapidly since the referendum and significant numbers are leaving the UK health and care workforce . This decline has been offset by a greater rate of increase in numbers of non-EEA nurses arriving.
From 1 January 2021, all workers arriving from the EEA and non-EEA countries will be subject to the same immigration rules. In February 2020, the Home Office published a policy statement setting out how these rules would work, as part of a new points-based immigration system.
The points-based system makes exceptions for the majority of health care professionals with an NHS job offer and for qualified social workers via a new fast-track visa route, known as the Health and Care Worker Visa. There are no exceptions made for other social care roles, such as care workers.
All successful Health and Care Worker Visa applicants are also exempt from the Immigration Health Surcharge, a one-off charge levied against arriving migrant workers as part of the visa application process. The system has been designed to make international recruitment into health and social care roles more straightforward for employers and employees alike.
These changes to immigration rules are in law as part of the Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020. As such, from 1 January 2021, they apply to all workers arriving to work in the NHS or adult social care. All workers from EEA nations who are already resident in the UK have until 30 June 2021 to apply for the EU Settlement Scheme which will guarantee their right to work in the UK indefinitely.
Implications
The NHS and the social care sector would not be able to function without their international workforce.
In the short term, the current workforce shortfall in the NHS is so severe that it will require at least 5,000 more nurses a year to be recruited from overseas while measures to increase domestic training capacity take effect. The government recognises that international recruitment is key to increasing NHS staff headcount and has committed to recruiting an additional 12,000 nurses from overseas by 2024/25.
This commitment will require an immigration policy that is supportive of ethical international recruitment if it is to be realised. Ending the free movement of labour from the EEA to the UK has placed a new barrier to recruiting staff from those nations, however, it will not materially change or create new barriers to recruiting staff from non-EEA nations from where a growing number of international staff in health care services are arriving (General Medical Council 2020; Nursing and Midwifery Council 2020).
It is too early to say if the new Health and Care Worker Visa alongside the Immigration Health Surcharge exemption will maintain the UK’s status as an attractive place to come to work for non-British nationals now the transition period has ended. The restrictions of movement necessitated by the Covid-19 pandemic have halted and undermined efforts to increase international recruitment to the NHS.
In the social care sector, the new arrangements will create a greater challenge as care workers are not eligible for a Health and Care Worker Visa. The advice, given by the Migration Advisory Committee and accepted by government, is that workforce shortages in social care are driven by market forces, such as rates of pay, and would not be resolved by increased international recruitment. However, with no immediate solution to the market or funding issues in social care, the current arrangements are likely to mean that social care providers will struggle to recruit new overseas staff in 2021, adding to existing staff shortages and compounding the pressure on the social care workforce.
2. Mutual recognition of professional qualifications
The Mutual Recognition of Professional Qualifications Directive is an EU-wide directive that allows professional regulators in all member states to automatically recognise professional qualifications gained in other member states and grants entry to all relevant professional registers, including medical and social work registers.
The directive no longer applies to the UK now the transition period has ended, but the UK government has decided to continue recognising qualifications gained in the EEA for at least two years after the transition period ends. This is not reciprocal and there is no guarantee that qualifications gained in the UK will be accepted by professional regulators in EEA nations.
Professional regulatory bodies are working with the UK government to review future registration requirements for those with qualifications gained in the EEA and decide what they will be from January 2023.
Implications
With current transitional arrangements set to remain in place, little will change for UK-based employers until new arrangements are decided and implemented in 2023. This uncertainty may hinder the government’s efforts to attract more international staff to work in health and care.
The greater change is for those with health and care professional qualifications gained in the UK. They will no longer be automatically accepted on EEA states’ professional registers and therefore will face new barriers to taking up roles in those nations. Arrangements and processes for those with UK qualifications being accepted onto professional registers will differ between member states.
Reciprocal health care
EEA citizens are entitled to a European Health Insurance Card (EHIC) that provides them with access to medically necessary, state-provided health care during a temporary stay in any EEA country. While under current EU rules, people who move from one EEA country to live in another are given access to health care on the same basis as nationals of that country.
The Withdrawal Agreement guarantees that UK citizens legally resident in EEA countries and EEA citizens legally resident in the UK before the end of the transition period as well as frontier workers and those who live in both the UK and an EU state will continue to benefit from their current rights of access to health care services for their life time. NHS providers can continue to use existing processes to recover the cost of treating these groups from EU states.
Rights of access to health care for UK citizens who move to the EEA after the transition period is being decided independently by each member state and will differ substantially between them. The UK government maintains a collection of guidance outlining the rules in each state. EEA citizens who move to the UK to work or study from 1 January 2021, for more than six months at a time, will need to complete the relevant visa application and pay the Immigration Health Surcharge in order to access NHS services. Rights of access for EU citizens who need work or study in the UK for less than six months is still being decided.
For UK citizens who travel for short-term stays, eg, holidays or leisure, in EEA countries and EEA nationals who travel to the UK all EHICs issued before 1 January 2021 will be honoured up until their expiry date, five years after their issue date. The UK has now stopped issuing new EHICs to its citizens but will continue to issue them to EEA citizens who have been resident in the UK since before the 1 January 2021.
For UK nationals, EHICs will be replaced by a new Global Health Insurance Cards (GHIC). The GHIC will only be accepted in EU member states, it will not be accepted in Norway, Switzerland, Iceland or Liechtenstein who are members of the EEA only, and not full EU member states. The new arrangements are reciprocal, and the UK will provide eligible health care to EU citizens with a valid EHIC issued after 31 December 2020.
Like the EHIC, the GHIC will cover both urgent and routine medical treatment, such as dialysis or chemotherapy, for UK nationals while in the EU. It will not cover planned treatment, for example, where a UK citizen travels for a specific treatment or to give birth.
The Department of Health and Social Care’s advice remains that UK citizens should still take out travel insurance alongside an EHIC/GHIC while travelling in the EEA/EU.
Implications
The arrangements for access to health care for people who move from the UK to live in an EEA state, or for EEA nationals who move to the UK, will differ between each member state. In many cases it is likely that additional requirements and bureaucracy, such as providing proof of residency, will be in place for UK citizens resident in the EEA.
The situation around short-term travel remains, in principle, largely unchanged as the GHIC will replace the EHIC for UK citizens while in EU countries. However, UK citizens will need to take out travel insurance to guarantee access to urgent or medically necessary treatment while in countries that are EEA states but not members of the EU.
Regulation
Supply of medicines and medical devices
The United Kingdom is a net importer of medicines and medical devices from the EEA). In 2019 exports were valued at £9 billion while imports of medical products were valued at £18 billion.
Pharmaceutical products are regulated at an EEA wide level by European Medicines Agency (EMA) and so only need one set of licences to move between member states. The UK is now outside the customs union and regulatory oversight of the EMA, meaning that additional checks are now required at ports in the UK and the EEA before goods, including medical products, can cross the border.
In this section, we look at how the UK’s new medicines and medical devices regulatory framework will work, how this differs from EMA oversight and the new customs checks that will be required when moving medicines between the EEA and the UK.
1. Regulation of medicines and medical devices
On 1 January 2021 the UK left the EMA and the Medicines and Healthcare products Regulatory Agency (MHRA) became the UK’s sovereign regulator. In 2019 the UK parliament passed regulations that allowed this change to happen, and effectively transferred EU rules into UK law.
Going forward, the new trade deal contains specific clauses that mean both the UK and EEA states formally recognise each other’s good practice in medicine manufacturing. However, this is not a full mutual recognition of each other’s regulatory checks, known as conformity assessments, as it only covers the quality of manufacturing premises. There are many other parts of the approval process, such as batch testing, that the agreement does not cover. This means that both the MHRA and EMA will need to be assured that any medical products imported to be sold in their territory meets their required standards across the board via new customs checks and approvals at the border. As it stands both regulators will be applying equivalent standards.
In theory, domestic regulations could be amended now the transition period has ended and the UK could begin to diverge from the EU rules. However, this should be prevented by the three interrelated factors; the technical annexes of the new trade deal, the Northern Ireland protocol and the UK Internal Market Act.
The trade deal puts in place a range of measures to encourage both the UK and the EU to minimise any regulatory divergence and to follow agreed international standards as closely as possible. Both sides must carry out a full impact assessment of any changes to technical regulations and notify the other party of their decision including setting out their reasons for doing so.
The Northern Ireland Protocol, which was part of the Withdrawal Agreement signed by the Prime Minister in October 2019, guarantees that Northern Ireland will not diverge from the standards applied in the Republic of Ireland, which remains part of the EU and, therefore, the EMA. This means that the entire island of Ireland will follow the same regulatory standards. For traders moving medicines between Great Britain and Northern Ireland, there will be new customs checks at ports in Northern Ireland to ensure any products arriving there meet agreed regulatory standards. The intention is for these checks to be light touch and to avoid the need for additional paperwork.
The UK Internal Market Act embeds consistent market access principles across the UK, so that any good produced or imported legally to any part of the UK can be supplied or sold in any other part of it. Therefore, regulatory standards that apply in Northern Ireland as a result of the protocol should apply across England, Wales and Scotland.
Implications
In principle the key change for traders of medical products is that, from 1 January 2021, manufacturers will need to get a licence from the MHRA rather than the EMA to sell a medicine or medical device in the United Kingdom. The government and the MHRA have prepared guidance to explain what manufacturers must do to register and market their products in Great Britain and how the requirements differ in Northern Ireland.
Stepping out of the EMA regulatory framework and becoming a standalone, sovereign regulator, may pose operational and logistical challenges for the MHRA. Specifically, around recruiting and retaining the expert staff it needs while maintaining adequate trading income as part of its full-cost-recovery requirements.
In the longer term, given the commitment to regulatory alignment, these requirements may lead to a duplication of effort for manufacturers and traders operating across the UK and Europe, which may, in turn, lead to cost increases.
Concerns have also been raised by the MHRA’s former chair, that leaving the EMA could see manufacturers de-prioritise the United Kingdom as a country to introduce new medicines and devices to, meaning that people and patients may face delays in accessing new medicines.
2. Border system
Now that the UK is outside the EU’s customs union, new checks, customs declarations and paperwork will be needed to import and export goods to and from the EEA.
To prepare for this change the UK government developed a new Border Operating Model in 2020. From 1 January 2021, it will be implemented in three stages, which include an initial six-month window to complete declarations and pay VAT. From 1 July 2021 traders will have to make declarations at the point of entry.
The UK government decided to stagger the implementation of the new Border Operating Model to minimise any risk of disruption, along with other measures specifically designed to mitigate the risk of supplies of medicines and medical devices being disrupted. In August 2020 the UK government instructed medicine suppliers to maintain a stockpile equivalent to six weeks’ supply though the first three months of 2021. In addition, the Department of Transport has secured additional freight capacity to bring medicines into the country via other routes.
Implications
The Border Operating Model is not yet fully implemented, and the risk of supply-chain disruption remains. However, the UK government remains confident that any future disruption to the supply of medicine will be temporary. This, however, depends on the new border operating systems between Great Britain and EEA nations operating effectively, particularly at either side of the short strait crossing between Dover and Calais as three-quarters of medicine imported to the UK enters via that route.
The challenge of implementing a new Border Operating Model is significant and the new arrangements will see a great increase in the number of customs declarations being made at UK ports; HMRC is anticipating processing 270 million in 2021 compared to 55 million in 2019.
In the event of disruption, the UK government has put in place a wide range of mitigations to guarantee a continued supply of medic al products. However, these plans are as yet untested, and we cannot be sure how successful they will be.
The fact that the Covid-19 pandemic is ongoing at this time and some of the new vaccinations will be being imported (with the exception of the Oxford/AstraZeneca vaccine which is being manufactured in the UK) brings further cause for concern.
Level playing field and competition
A ‘level playing field’ is a trade policy term that refers to common rules and standards agreed between trading partners to ensure one country cannot gain an unfair competitive advantage. Level playing field issues have some direct and indirect implications for health and care services, as they can cover aspects of employment law as well as public procurement.
In the EU-UK negotiations the level playing field provisions around workers’ rights, environmental standards and taxation proved to be a sticking point, though a compromise was found, and new provisions are set out in the trade deal.
1. Workers’ rights and standards
The European Working Time Regulations, usually referred to as the working-time directive, limit the time an employee in any sector can work to 48 hours each week. It also sets minimum requirements for rest periods and annual leave. Employees can choose to opt-out of the directive, and in the health and care sector many do so because they are regularly on call or ‘sleeping in’ at their place of work.
UK legislation has transferred this directive into UK law, and while there have been concerns that after Brexit the UK government could diverge from or water down these standards, the new trade deal includes clauses that are intended to prevent this.
Both the UK and the EU have committed to enforcing these employment rights via inspection and regulation. If either side chooses to diverge from the agreed standards to an extent that it gives them a competitive advantage, then the other reserves the right to impose new trade tariffs.
Implications
The protection of workers’ rights and commitment to maintaining current standards will provide important legal protection for workers and should prevent health and social care staff working excessively long hours, which can pose a risk to staff wellbeing and patient safety. How this will work in practice and how effective the incentives and planned inspections will be in maintaining, or improving, workers’ rights remains to be seen. They could also be subject to legal tests and case law.
2. Competition law and public sector procurement
The impact of EU competition and procurement laws on the NHS is contentious. A combination of the Competition Act, provider licences and regulations continue to prohibit anti-competitive behaviour by NHS providers and commissioners. As existing EU directives have been incorporated into UK law, the government would need to repeal or amend UK law if it wished to change current competition policy. As such there will be no immediate changes as a result of the transition period ending.
Separately, NHS England and NHS improvement has developed a series of proposals for policy and legislative change to support greater collaboration and integration across the system. This includes proposals to reduce the role of competition and streamline procurement in the NHS. These proposals are not affected by Brexit or the end of the transition period.
Implications
The immediate implications of the transition period ending for competition law and public procurement are minimal. In time competition law and rules around public sector procurement in the UK may change, for example, if NHS England and NHS Improvement’s proposals for legislative change are enacted. Any future changes to competition law or procurement would only be an indirect consequence of leaving the EU.
Systems
Information sharing
1. Data sharing and adequacy
The new trade deal does not include a data adequacy agreement. This means that the EU has yet to formally decide whether the UK’s data protection regime is sufficient to protect the privacy of EEA citizens or is secure from external threats.
Without a data adequacy agreement there is no formal, legal mechanism to move data between the EEA and the UK. As such, and to avoid the need for complex service-level agreements, both sides have agreed to keep current EU rules in place in the UK, initially for the first four months of 2021, but with the option to extend it to six months. In this time EU officials will carry out a data adequacy assessment of the UK.
Implications
Without an EU data adequacy agreement health and care provider organisations, medicines and medical device manufacturers, health technology companies and research bodies that operate across the UK and the EEA would not have been able to automatically move their data between the two areas. Organisations would have had to set up multiple, costly and complex service-level agreements to keep their data moving.
The current EU agreement ensures continuity in the short term. If the EU decides not to grant the UK data adequacy status, then the UK would become a third country for data transfers. This would create additional bureaucracy and the need for safeguarding checks from any organisation moving data into the UK from the EEA.
2. Public health and health security co-operation
The UK has now left the European Centre for Disease Prevention and Control (ECDC), the EU agency responsible for monitoring infectious diseases and providing public health advice to member states. The ECDC’s work includes an Early Warning Response System that alerts members to new diseases and emerging epidemiological threats.
The UK will be able to request access to the Early Warning Response System on a case-by-case basis to help respond to emerging threats. However, at this stage it is unclear how access will be overseen and managed.
Implications
The Covid-19 pandemic has highlighted the importance of sharing public health data and information across borders. Given the UK’s geographical proximity to EEA states and the fact that goods and people will continue to travel between the two areas, the need for shared intelligence will remain great. The commitment to ad hoc information sharing via the Early Warning Response System is welcome, but the detail on how this will work in practice is insufficient and should be a matter of some concern.
Research
The academic, pharmaceutical and medical research community has long expressed concern about the impact that leaving the EU will have on science and research in the UK. The concerns centred on the ability to attract researchers from EEA countries to work in the UK and that EU-wide collaboration could be hindered or stopped entirely.
The new trade deal is accompanied by the Joint Declaration on Participation in Union Programmes which provides details of the EU-wide scientific and research programmes the UK will continue to be a member of. The UK will have access to Horizon Europe, the Euratom research and training programme, the fusion test facility ITER, Copernicus (the EU’s environmental observation programme) and the EU’s space surveillance and tracking service. The UK government will continue to make a financial contribution to the EU budget in exchange for ongoing involvement in these programmes.
The UK will, however, exit the Erasmus programme, a long-running student-exchange programme. It will replaced with the Turing scheme which will fund overseas student-placements and exchanges from September 2021.
Implications
The UK’s continuing participation in EU scientific research programmes means that the country will continue to benefit from collaboration and pooling of expertise across the EU. What this means for the UK’s ability to attract researchers to work in UK scientific institutions in the future is less clear.
Clinical trials
As a member of the EU, the UK conducted clinical trials at a national level but subject to EU regulations. In the future, clinical trials taking place in the UK will need to be registered on publicly accessible databases in accordance with MHRA requirements. If a trial is taking place across both UK and EEA sites it will need to be registered on the EU Clinical Trials Register as well as the MHRA register.
The MHRA has published detailed guidance on applying for a UK licence for clinical trials and the European Commission has published a notice setting out the current legal position. The new trade agreement contains a broad commitment from both sides not to diverge from existing regulatory standards, though it does not include a mutual recognition of these regulations. While regulatory equivalence should be maintained, both EU and UK regulators will need to assure themselves that trials taking place across UK and EEA sites are compliant.
Separately, rules around moving personal data will remain the same for at least the first four months after the transition period ends, while the EU assesses whether the UK’s data protection regime is adequate.
Implications
The new arrangements provide some much-needed clarity for organisations undertaking clinical trials across the UK and EEA. While this clarity will be welcomed by many, the dual regulatory regimes are likely to create additional bureaucracy and some duplication of effort.
Trade and health
Trade deals
The UK government has been, and continues to, develop new bi-lateral trade deals with a number of non-EEA nations.
While health services and public health have not been primary concerns in these negotiations, there is a well-established link between trade and health. Trade agreements have potential to deliver public health gains in the form of improved nutrition, as food supply and quality can improve, and increased investment in public services. They can also carry some risks if safety standards are dropped.
Trade agreements can also affect procurement processes and market access criteria as well as price and supply of products in the health and care system. Public sector procurement and oversight of health services are subject to domestic legislation and the government has publicly and repeatedly committed to keeping the ‘NHS off the table’ in future trade deals.
Implications
It is far too early to say what the implications of the UK’s current international trading policy will be on public health or on the health and care system. It is a complicated and multi-faceted area of public policy and international relations. Over the coming years researchers and commentators will be able to take stock of the possible long-term effects of current trade policy on health.
Conclusion
Many of the immediate changes that are a result of the UK leaving the EU are complex and technical. They will affect many aspects of the health and care system, ranging from the volume and pattern of vital international recruitment, to how the UK co-operates with its EEA neighbours to monitor public health threats and develop innovative new medicines and treatments.
These changes are happening as the UK steps outside of the EU’s customs union; this alone presents new risks to the UK’s supply chains over the coming months. While the risks have been minimised with mitigating actions such as stockpiling, they have not yet been entirely removed, the Border Operating Model has not yet been fully tested and there is potential for border delays to build over time.
Leaving the EU, agreeing a new trading relationship with the EU and pursuing new trading agreements with other nations mark a step change for the UK. It is step change that looks set to have a significant, long-run economic impact. The success or shortcomings of new trading relationships will drive or limit economic growth, which in turn will have consequences for public spending.
Looking to the future, there are both risks and opportunities, but this the new deal provides some much-needed certainty at a time when the health and care system could ill afford additional disruption.