Is there too much bureaucracy in the NHS? big election questions

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Ahead of the general election on 8 June, we examine the big issues around health and care.

What’s the issue?

The NHS can appear complex and bureaucratic, and is often criticised by politicians for employing too many managers.

What’s behind this?

The Health and Social Care Act 2012 introduced a series of top-down reforms that have resulted in a complex and fragmented system. Since then, new initiatives such as the vanguards and sustainability and transformation plans (STPs) have overlaid the existing landscape.

Complexity at a local level is compounded by the number of national bodies involved in regulating the NHS. These arrangements create a significant regulatory burden, hindering efforts to integrate care and generating substantial transaction costs1 . This led Sir Stuart Rose, the former chief executive of Marks and Spencer, to conclude that ‘the NHS is drowning in bureaucracy’ in his review of NHS leadership published in 2015.

Efforts are being made to reduce fragmentation and ease the bureaucratic burden on NHS organisations. At a national level, Monitor and the NHS Trust Development Authority have been brought together as NHS Improvement, and a single regulatory framework has been developed for NHS providers. Locally, NHS organisations are collaborating to tackle the system complexity that resulted from the coalition government’s reforms.

Clinical commissioning groups (CCGs) are collaborating and in some cases merging; general practices are forming federations; and providers are merging, establishing hospital chains, and sharing back-office functions. There are also moves to establish accountable care systems in which providers collaborate to meet the needs of the populations they serve. CCGs and local authorities in some areas are working together to commission care.

In 2010, the coalition government set a target to cut the cost of NHS administration by a third. As part of this, the number of managers in the NHS fell until mid-2013. Since then, numbers have gradually increased, but remain 19 per cent below the 2010 peak. In January 2017, there were around 30,900 managers (full-time equivalents) in the NHS, just under 3 per cent of the workforce.

The King’s Fund view

The NHS is frequently criticised for employing too many managers, often by politicians who label them ‘bureaucrats’. However, there is no persuasive evidence that the NHS is over-managed.

The OECD has reported that UK spending on health administration is approximately 2 per cent, below the international average of 3 per cent. Managers play a critical role in supporting clinicians in the NHS and they should not be denigrated.

The NHS as it is currently organised is overly complex, over-regulated and generates substantial transaction costs. Current moves to streamline and simplify the organisation of the NHS in England should continue and may require changes in legislation in due course.

  • 1The costs involved when ‘purchasers’ within the current system (eg CCGs) buy services from ‘providers’ (eg hospital trusts)