NHS crisis makes UK the sick man of Europe
Long-term illness and lengthy waiting lists for treatment are stifling the economy, writes Tom Rees
‘NHS backlogs and long Covid seem to be making a contribution to the increase in poor health’
‘I think most of it is that people just aren’t getting the help they need to get back to work’
While the pandemic is fading into the background, the long-term problems it has left in the labour market are worsening. Growing NHS waiting lists and deteriorating mental health across the country have left a record 2.5m people unable to work because of long-term sickness.
Britain’s poor health and healthcare backlogs are hobbling businesses, with the workforce shrinking yet again in the three months to September.
Official data showed an extra 133,000 people fell out of the workforce as a result of long-term sickness over the period.
The economic inactivity rate – people not in work or seeking a job – increased by a further 0.2 percentage points to 21.6pc compared with the previous three months, according to the Office for National Statistics, as a wave of illness and early retirement bites.
It means that 629,000 people have dropped out of the labour market since the pandemic struck, driving widespread worker shortages that have made it hugely difficult for businesses to expand.
NHS waiting lists reached a record 7m in England and economists warn the staff shortfalls will continue until the healthcare backlog is cleared. The waiting list is expected to continue growing for months, peaking in late 2023.
Record sickness levels suggest the labour market will remain ultra-tight even as demand for staff shows signs of peaking. Vacancies fell for a fourth straight month to a still-elevated 1.2m and employment remained flat, down by more than 300,000 on pre-covid levels.
However, most concerning for economists is the climbing number of people dropping out of the workforce, a problem almost unique to the UK after the pandemic. A shrinking workforce bucks the trend of increasing participation in almost every other European country.
James Smith, ING economist, says that ill health forcing workers out of the labour market “unnervingly” appears to be a Uk-specific issue. “It’s hard to escape the conclusion that ballooning NHS waiting lists are a contributing factor.”
The number of people classified as long-term sick has risen sharply by 407,000 since the pandemic, though the exact cause is still causing headaches for economists and health experts. Healthcare analysts say the strained NHS is a key factor but is one of just a number causing a sickly workforce. The ONS has noted that the biggest year-on-year increase in long-term sickness came before the pandemic.
“NHS backlogs and long Covid seem to be making a contribution to the increase in poor health,” says David Finch, at the Health Foundation. “[But] this has been happening over the longer term.”
He adds: “Some of this is demographic change where we’ve got a bigger birth cohort coming through into that 50 to 65 age group. There is a higher prevalence of poor health in the population and one of the drivers of that seems to be increased mental health and depression.”
Bee Boileau, economist at the Institute for Fiscal Studies (IFS), says: “We find that 70pc of the increase in health-related inactivity is driven by people who have been out of work for at least five years.”
What analysts do know is that ill health is coming at a huge cost for the economy.
Sickness keeping people out of work is costing the economy £180bn a year, according to the Confederation of British Industry. It estimates that 131m working days are being lost to sickness every year as staff shortages cripple some sectors.
The twin problems of ill health and early retirement mean that next year Britain will be the only developed country with lower employment than before the Covid crisis, according to the Institute for Employment Studies (IES).
Tony Wilson, head of the IES, says: “We have worse growth than other countries because we’re not meeting demand, we’re not doing enough to increase our labour supply.”
He warns that it will be a long-running problem for the labour market because the NHS waiting list is still growing, the population is older and less healthy, and there is a lack of job support for the sick.
“The single biggest driver of higher economic inactivity is people who left work before the pandemic and have long-term health problems,” he says.
“I don’t think it’s necessarily that people are getting sicker, [though] that might be part of it. I think most of it is that people just aren’t getting the help they need to get back to work.”
In short, NHS backlogs are worsening underlying health conditions in the workforce. That means labour shortages are unlikely to be resolved soon.
The waiting list in England has hit a record 7.1m people and the IFS highlights that treatment levels are still below 2019 levels. Its economist Ben Zaranko says that this is despite NHS spending in England being 12pc higher in real terms than in 2019-20 and a 10pc-plus increase in the number of doctors and nurses.
The think tank predicts that the waiting list will peak at 8.7m in late 2023 but warns that getting backlogs falling next year will hinge on increasing treatment volumes. Failing to boost treatment levels could mean waiting lists continue rising “well beyond next year”.
It says: “Volumes have remained stubbornly below pre-pandemic levels for all of 2022 so far, and the target of increasing volumes by 30pc by 2024-25 looks increasingly ambitious.”
Health experts warn that capacity is a problem with the UK having fewer hospital beds per capita than other developed countries.
Finch says: “Although funding has been increasing, we’ve done research that would suggest that it still requires further investment. But also there is a constraint from staffing. Unless you have both of those things at appropriate levels, it will be very hard to drive down the waiting lists and improve things.”
As the NHS struggles to meet the challenge of record backlogs, Britain’s jobs market also faces a long road to recovery.