Brexit: the implications for health and social care

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Although the EU has limited legal jurisdiction over how health and care services are organised and provided in member states (European Union undated), the UK’s vote to leave the EU will have major implications for health and social care in England.

First, because the government has been clear that Brexit will mean the UK leaving the European single market and the customs union – arrangements that currently play an important role in facilitating the delivery of health services, via access to workforce as well as goods and services. Second, because EU directives affect many areas of UK law that impact on the delivery of health and care services. Third, because the vote has ushered in a period of significant economic and political uncertainty at a time when the NHS and social care are already facing huge financial and operational pressures.

Almost 18 months ago, the Fund published an article that considered some of the most important implications for health and social care in England in the wake of the UK’s vote to leave the EU. 

Since then, the government has started to take steps towards implementing Brexit. These include:

  • triggering Article 50 (a clause in the Treaty of Lisbon that gives any member state the right to quit the EU unilaterally)
  • publishing a series of formal position papers setting out the building blocks of the UK’s future relationship with the EU
  • beginning the UK’s official negotiations with the EU
  • presenting the European Union (Withdrawal) Bill 2017–19 to parliament.

However, despite all this activity, many of the questions we set out last year remain unanswered, principally because negotiations have not yet progressed to discussing the future relationship between the UK and the EU. In some cases, especially in relation to the health and social care workforce, the risks we highlighted last year have since materialised, with consequences for services.

In this update we look at the developments that have taken place since the 2016 referendum.

Staffing

Brexit - staffing image

The policy of freedom of movement and mutual recognition of professional qualifications within the EU means that many health and social care professionals currently working in the UK have come from other EU countries. This includes nearly 62,000 (5.6 per cent)1 of the English NHS’s 1.2 million workforce and an estimated 95,000 (around 7 per cent)2 of the 1.3 million workers in England’s adult social care sector (NHS Digital 2017; Skills for Care 2017). The proportion of EU workers in both the NHS and the social care sector has been growing over time, suggesting that both sectors have become increasingly reliant on EU migrants.

The NHS is currently struggling to recruit and retain permanent staff, with particular gaps in nursing, midwifery and health visitors (National Audit Office 2016). Similar problems exist in the social care sector, which has an estimated vacancy rate of 6.6 per cent and an overall turnover rate of 27.8 per cent (equating to around 350,000 people leaving their job each year) (Skills for Care 2017). 

Until the UK leaves the EU, the policy on freedom of movement remains unchanged. One of the main priorities in the first phase of the UK’s negotiations with the EU has been clarifying the status of EU citizens currently living in the UK and of UK citizens living in other EU countries, and the Prime Minister has publicly committed to ensuring EU citizens will be able to stay in the UK (May and Prime Minister’s Office 2017). We welcome the recent news that the government has now delivered on that commitment (Home Office et al 2017a). 

Nevertheless, the referendum result appears to already be having an impact. The number of nurses and midwives from Europe leaving the Nursing and Midwifery Council’s register between October 2016 and September 2017 increased by 67 per cent compared to the 12 months before, while the number joining it fell by 89 per cent (Nursing and Midwifery Council 2017). While it is not possible to directly attribute these changes to the UK’s decision to leave the EU, it is hard not to point to it as a key factor, although there are other contributing factors, including the introduction of new English language requirements in 2016 (Murray 2017).

Looking ahead, the Prime Minister has made clear that freedom of movement is one of the UK’s ‘red lines’ in negotiations with the EU and that, following withdrawal from the EU in March 2019, the migration of EU nationals will be subject to UK law (Department for Exiting the European Union et al 2017c). Beyond this, there is still very little detail about what the UK’s policy on migration will look like post-Brexit.

The Fund understands that a White Paper setting out the government’s proposals for future immigration policy is due to be published later this year or in early 2018, followed by an immigration bill in early 2018. Until then, important questions about future policy remain unanswered, including how restrictive the system will be for both EU and non-EU nationals (might it even allow for more non-EU immigration?), and whether it will mirror the current non-EU system, which is focused towards ‘high-skilled’ labour rather than on areas with shortages. To inform the design of the new system, the government has commissioned the independent Migration Advisory Committee to gather evidence on the role of migration in the economy and advise on the UK’s post-Brexit border policy. However, the Committee is not due to report until September 2018.

Recent estimates suggest that both the health and social care sectors will face a considerable shortfall in staff in future if EU migration is limited after Brexit. Modelling from Department of Health published in the HSJ projects (under a worst case scenario)3 a shortage in the UK of between 26,000 to 42,000 nurses (full-time equivalents) by 2025/26 (Lintern 2017). Projections from the Nuffield Trust suggest a shortfall in England of as many as 70,000 social care workers (headcount) by the same date (Dayan 2017).4

A wide range of staff groups is likely to be affected, including lower-skilled workers, particularly in social care (where, anecdotally, we are hearing from providers that the outcome of the referendum is already having an impact on their ability to recruit into lower paid roles). With just under a quarter of EU nationals working in what are classed ‘elementary occupations’ (including jobs such as cleaners and waiters) (Office for National Statistics 2017) it is likely that in future both NHS and social care providers will face increased competition from other industries, such as retail, when trying to recruit lower-skilled staff.  

  • 1. Data presented on a headcount basis, excluding approximately 80,000 staff with no nationality recorded. Data excludes GPs and GP practice staff as data on the nationality of these staff groups is not collected. Data on the country where GPs gained their primary medical qualification is available at NHS Digital.
  • 2. Data represents posts in local authority and independent sector employers only. Excludes posts in NHS and personal assistants.
  • 3. This scenario assumes that all EU and non-EU inflows of nurses and midwives would stop after changes to immigration rules. Shortage is compared to the forecast base case supply.
  • 4. Based on EU migration ending in 2019.

Accessing treatment here and abroad

Brexit - accessing treatment

Currently, EU rules govern UK citizens’ access to health and care in the EU, and EU citizens’ access to UK services.

EU citizens are entitled to a European Health Insurance Card (EHIC) which gives access to medically necessary, state-provided health care during a temporary stay in another EEA country.5 The cost of treatment under these schemes can be subsequently reclaimed from the visitor’s country of residence via reciprocal health care agreements. Around 27 million people currently hold European Health Insurance Cards issued by the UK (Fahy et al 2017). 

In addition, under EU rules, people who come from elsewhere in the EU to live in the UK, or who leave the UK to live in another EU country, have access to health care on the same basis as nationals of that country. Estimates of the number of people this involves differ among the available sources. However, it has been suggested that there are around 1 million British migrants living in other EU countries, compared with around 3 million EU migrants living in the UK (Department for Exiting the European Union 2017c). 

While the UK is a member of the EU, the rights of EU nationals already living in the UK and UK nationals living in the EU remain unchanged. The government has also recently confirmed that EU nationals currently living in the UK and UK nationals currently living in the EU will be able to continue to reside abroad and will have the same access to health care as they do now (Home Office et al 2017a, b). 

Future arrangements, including those relating to EHICs or the rights of UK and EU nationals to access health care when moving abroad in the future have not been discussed. However, the UK has said that it intends to seek an ongoing arrangement ‘akin to the EHIC scheme’ as part of negotiations on future arrangements with the EU (Department for Exiting the European Union et al 2017a). This will obviously be subject to negotiation. 

  • 5. A valid EHIC entitles people to access state-provided treatment that is medically necessary during a temporary stay in another European Economic Area (EEA) country or Switzerland. Treatment is provided on the same basis as it would to a resident of that country, either at a reduced cost or for free. For example, some countries require patients to contribute a percentage towards the cost of their treatment, known as a patient co-payment.

Regulation

Brexit - regulation image

There are a number of EU regulations that impact on the health and care system, including:

Regulation of medicines and clinical trials

EU legislation provides a harmonised approach to medicines regulation across the EU member states. The UK is currently part of the centralised authorisation system operated by the European Medicines Agency (EMA) which will be moving from London to Amsterdam.

The EMA is responsible for the scientific evaluation of human and veterinary medicines developed by pharmaceutical companies for use in the EU. Under current arrangements, companies can submit a single application to the EMA to obtain a marketing authorisation that is valid in EU, EEA and European Free Trade Association (EFTA) countries. Being a member of the EMA also gives the UK ‘tier 1’ market status, meaning that pharmaceutical and device companies prioritise the UK as a market for launching their products.

The UK has its own national regulatory agency, the Medicines and Healthcare products Regulatory Agency (MHRA). However, this deals with national authorisations intended for marketing only in the UK.

The Secretary of State for Health has commented that he expects the UK to leave the jurisdiction of the EMA when it leaves the EU, and that the UK would then seek to work closely with the EMA (Hunt and Clark 2017). We assume that the intention would then be for the MHRA to operate as a sovereign regulator outside the EMA, but with regulatory equivalence and working closely with the EMA and other international partners. There are already precedents for such arrangements – the EMA currently co-operates with regulatory bodies around the world and has specific agreements in place with countries including the United States, Canada and Switzerland.

However, some have expressed concern that if the UK leaves the EMA arrangements and develops its own drug approval system, the UK may lose its ‘tier 1’ status and end up at the back of the queue for new medicines (Rawlins 2017). For example, in Switzerland and Canada, which have separate approval systems, medicines typically reach the market six months later than in the EU (Fahy et al 2017).

The UK faces a similar issue in relation to future access to medical radioactive isotopes, which are used in the diagnosis and treatment of cancer. In 2016/17 the NHS performed more than 592,000 diagnostic procedures that rely on radioactive material (NHS England 2017).6 The European Atomic Energy Community (Euratom) creates a single market for nuclear energy in Europe and is responsible for co-ordinating and regulating access to these materials. The government has stated that when the UK leaves the EU it will also leave Euratom (Department for Exiting the European Union 2017b), although it hopes to continue working closely with it in future. 

Although the government has stated that the UK’s exit from Euratom will not have an impact on the availability of radioactive materials, many are concerned about the impact on future supply, including increased costs and a risk to patients should access be disrupted (British Nuclear Medicine Society 2017; Strickland 2017).

Clinical trials for new drugs are currently carried out on a national level but subject to EU regulations, including for registration of trials. The revised EU clinical trials directive, due to take effect in 2018, will harmonise arrangements across the EU with the aim of creating a single entry point for companies that wish to carry out trials of new drugs on participants in different countries.

Some in the pharmaceutical industry have expressed concern that leaving the EU could result in the UK losing out on some trials that might otherwise benefit patients, as the UK would no longer be part of the harmonised procedure. These trials are particularly important for rare diseases and personalised medicine, as multi-country trials provide researchers with access to the large populations required. 

  • 6. This count includes procedures under nuclear medicine, PET-CT scans and SPECT scans

Competition law

The impact of EU competition and procurement laws on the NHS is contentious. As the relevant EU directives have already been incorporated into UK law, the government would need to repeal or amend the law if it wished to reverse current arrangements. Although a combination of the Competition Act, Monitor’s provider licences and the Procurement, Patient Choice and Competition Regulations continues to prohibit anti-competitive behaviour by NHS providers and commissioners, leaving the EU would allow policy-makers to modify these arrangements and other relevant legislation.

Many in the NHS would welcome changes in this area. Simon Stevens, Chief Executive of NHS England, has previously remarked that competitive tendering, in which commissioners invite bids from other NHS and private providers, can often create ‘frictional cost and dislocation’ in the NHS, and has said that the UK will be in a position to ‘shape our own decisions’ in this area once the UK leaves the EU (Dunhill 2017).

The government has stated its intention to ‘ensure we protect our ability to maintain control of the provision of public services, like the NHS, in new trade agreements’ (Department for International Trade et al 2017). However, its ability to do this will depend on the UK’s future trading relationship with the EU, which has not yet been agreed.

Working time directive

One of the most contentious pieces of EU legislation affecting the NHS are the European Working Time Regulations – usually referred to as the working time directive – which were introduced to support the health and safety of workers by limiting the time that employees in any sector can work to 48 hours each week, as well as setting minimum requirements for rest periods and annual leave.

In the short term, the government’s Repeal Bill seeks to convert existing EU law into domestic law to ensure that, as far as possible, the same rules and laws will apply after Brexit. This means that workers’ rights under EU law will continue to exist under domestic law after the UK has left the EU, providing continuity to employers and employees in the short term.

Brexit may allow future governments to amend domestic legislation to remove this regulation, should they wish to, although their ability to do so will be subject to wider negotiations regarding access to the single market. However, the current government has committed to preserving the working time directive after the UK leaves the EU (Department of Health 2017).

Cross-border co-operation

Public health

Brexit co-operation image

Public health legislation for a number of policy areas, in particular food safety and nutrition, tobacco, alcohol, radiation, environment, housing standards and chemicals in air, water and land safety, is drawn from established EU legislation, standards and regulations, with relevant directives transposed into UK legislation.

EU legislation has had a significant impact in some areas, such as air quality, that cannot be successfully controlled at national level alone. In other areas, such as tobacco control, the UK currently leads the way in Europe, having gone further than required by a recent EU directive, by introducing standardised packaging (Joossens and Raw 2017).

When the UK leaves the EU, it will have the opportunity to consider whether transposed legislation should be maintained or amended. While the government has not yet clarified its intentions on this issue, some have expressed concern (see, for example, Creagh 2017; Fahy et al 2017) that, once EU oversight is removed, the UK could set less stringent standards in relation to some areas. On the other hand, decision-making in a community of 28 countries can be cumbersome and slow. If the political vision and will existed, the UK could choose to take bolder and faster action on public health after leaving the EU (Faculty of Public Health 2016).

The EU also operates systems for the early warning of communicable diseases, managed by the European Centre for Disease Prevention and Control (ECDC). These facilitate the rapid sharing of information and technical expertise in response to potential pandemics, communicable diseases and other cross-border health threats. Recent examples of collaboration include managing the H1N1 ‘swine flu’ pandemic and efforts to tackle anti-microbial resistance. Leaving the EU does not necessarily mean the UK has to leave the ECDC; both Norway and Switzerland (non-EU member states) work with the ECDC, but do not have a formal role in its decision-making.

Research

The UK has furthered its scientific research agenda through EU collaboration, as a result of access to European research talent and to important sources of funding. For example, between 2007 and 2013 the UK received 8.8 billion euros for research, development and innovation activities while contributing only 5.4 billion euros to EU research and development (The Royal Society 2015). NHS organisations benefit from a range of EU funding schemes including Horizon 2020 and the European Structural Investment Fund (ESIF).

In the short term, the government has committed to honour funding agreements for ESIF projects that were signed before the Autumn Statement 2016, even where these continue after the UK has left the EU. Funding for projects signed after the Autumn Statement will be funded if they provide strong value for money and are in line with domestic strategic priorities. For Horizon 2020 projects, the government will underwrite the funding for all successful bids that are submitted before the UK leaves the EU (Gauke 2016).

In the longer term, arrangements are unclear. However, the government has stated that it wishes to ‘establish an ambitious agreement on science and innovation that ensures the valuable research links between us continue to grow’ (Department for Exiting the European Union 2017a). While it may be possible to continue to participate in some research programmes after the UK leaves the EU (non-EU countries are able to participate in Horizon 2020 as associates or third countries, for example), it is unlikely that projects in the UK would be eligible to receive EU funding and the UK would have limited influence over work programmes.

Members of the academic, pharmaceutical and medical communities have already expressed serious concerns about the impact of leaving the EU on science and research in the UK (see, for example, Lechler 2016; Mossialos et al 2016). Nobel Prize winner Professor Sir Paul Nurse, Chief Executive of the Francis Crick Institute, has warned that Brexit could be a disaster for science in the UK because of its impact on the free movement of researchers across Europe and on the ability of UK researchers to attract research funding (Ghosh 2016).

In recent months the government has published a life sciences industrial strategy (Office for Life Sciences 2017) and sector deal (Department for Business, Energy and Industrial Strategy et al 2017) intended to promote the UK as a place to conduct medical research and as a global leader in life sciences. These documents include an aspiration to increase research and development spending to 2.4 per cent of GDP by 2027, and highlight the need for an immigration system that allows the recruitment and retention of international talent.

Funding and finance

Brexit - funding image

In the long term, the performance of the wider UK economy will be one of the most important influences on funding for the NHS and social care.

With negotiations over the UK’s exit from the EU ongoing, it is difficult to predict the economic outlook with any certainty. However, a range of independent economic forecasts suggest that Brexit is set to have a significant long-term negative impact on the UK economy, placing additional pressure on public finances (Bank of England 2017; OECD 2017; Office for Budget Responsibility 2017).

If these warnings prove correct and cuts or lower growth in public spending follow, then the implications for both the NHS and social care would be significant, particularly given existing pressures in both sectors. Much will depend on the UK’s future trading relationships. The government has said that the UK will exit both the single market and the customs union after it leaves the EU, although it has proposed a time-limited implementation period following departure, to allow businesses time to adjust and new systems to be put in place. However, beyond that the situation remains unclear, although the government has said it will be pursuing ‘the freest and most frictionless trade possible in goods between the UK and the EU’, as well as hoping to forge new trade relationships around the world (HM Treasury et al 2017).

If no trade deal is agreed, the UK will fall back on World Trade Organization rules, which could see specific tariffs being be imposed on some goods and services. In addition to any wider economic implications, this could increase the cost of many goods and services for the NHS and social care sector, and could also impact on supply, including of drugs and treatments.

Pharmaceutical companies and industry bodies have publicly expressed concern about the potential consequences of this scenario. European and UK supply chains of medicines and medical technologies are ‘profoundly integrated’, meaning that any new tariff agreements or inspections could cause significant disruption to the supply of medicines to patients, particularly those that are time and temperature sensitive, such as cutting-edge cell and gene therapies (Association of the British Pharmaceutical Industry 2017; AstraZeneca 2017).

Conclusion

Although negotiations are still in their early stages, the UK’s decision to leave the EU is already having an impact on the NHS and social care: for example, the decision has now been taken to move the EMA to Amsterdam and the number of some types of health and social care staff joining the workforce from Europe, has fallen.

Brexit may present some opportunities for the UK, in particular the chance to go further and faster on public health regulation and remove rules on competition that are seen to present obstacles to the integration of and collaboration between health services.

However, if, as the government has stated, freedom of movement and membership of the single market and customs union are to end when the UK leaves the EU, then the NHS and social care face a number of significant threats. These include: the potential impact on the health and social care workforces that rely considerably on staff who are EU nationals; the impact on future trading relationships, which could affect the affordability and supply of drugs and other products; and, of course, the impact on the wider economy, the performance of which will affect future funding settlements for health and social care.

As the government seeks to negotiate the UK’s future relationship with the EU, it is essential that the issues we have identified here are high on the agenda.

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The Royal Society (2015). UK research and the European Union: the role of the EU in funding UK research [online]. The Royal Society website. Available at: https://royalsociety.org/topics-policy/projects/uk-research-and-european-union/ (accessed on 1 December 2017).

The author would like to thank colleagues from The King’s Fund for their input to this report: Siva Anandaciva, David Buck, Ben Collins, Leo Ewbank, Richard Murray, Lisa Oxlade and Patrick South.

Comments

Roger Steer

Position
Director,
Organisation
HAC
Comment date
14 December 2017

I'm surprised that the issue of securing recompense for the NHS from the 3m EU migrants living full time in the UK is not more fully addressed.
In France a UK migrant has to pay c £2000 insurance on top of normal taxes.
Introducing a similar scheme in the UK would raise c £3-6bn for the NHS. Why does The Kings Fund not mention this?
Moving the UK away from a universal system to a contributory system as envisaged by Beveridge would be a way of funding the NHS and harmonising with europe. Pensions are provided on a contributory basis - why not health?

Simon O' Connor

Comment date
21 December 2017

The whole point of the NHS is that it is universal and free at the point of consumption. Pensions are not all contributory.

Mike Little

Comment date
11 January 2018

The NHS needs to change, from my recent experience the nurses and doctors on the front line are doing a valiant job is a disorganised, inefficient for example they seem more focused on taking away hearing aids, for 90 year old people leaving them with a poor quality of life, then when you take the elderly relative to A&E because they have fallen - they ask you to shout at them to ask the doctors questions, when you point out about their hearing aid - they simply ignore and say its nothing to do with them and blame budget cuts or say go to specsavers....really ?- all 3 of the pensioners I have tried to help in different counties in the UK, fought in WW2, one a glider pilot could not even get in to a hospice in the last days of his life as he was told he was to ill ? weeks before he was not ill enough 97 years of age....He fought for the NHS and it let him down in his hour of need.... Its not the government that's at fault here although they play a part in long term funding , its the layers of useless managers papering over the cracks that are at fault, robbing the elderly of their homes to pay for care when those with nothing get everything free, ........

Kieran

Position
Project Worker / Youth Worker,
Organisation
TMF
Comment date
13 January 2018

Studies show that in general EU migrants in the UK pay more into the system than they use, so there is no recompense to secure as such - there's no deficit as a result of EU migrants using the NHS, after all they pay tax like everyone else. The NHS could be doing more to claim fees from EU countries when EU tourists or those on short stays use the NHS. Full fact do a great piece on it:

https://fullfact.org/europe/eu-immigration-and-pressure-nhs/

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