The NHS’s workforce shortages illustrate the UK’s dependence on migrant labour

Vivek Kotecha | July 19, 2019 | Blog


Photo by Blake Guidry on Unsplash

Why is the world’s ninth richest country persistently unable to train up enough doctors and nurses for its health service? Currently the NHS is facing a shortage of 40,000 nurses (10% of all posts) and 100,000 staff vacancies across all trusts. Whilst improved staff conditions and more funding for training will help close this gap, it is expected that immigration will be vital to help fill the vacant posts, particularly in nursing.[i]

It’s easy to explain the workforce shortages and our need for overseas workers as the result of recent policy choices, such as abolishing the nursing bursary, but even back in 1971 31% of all doctors working for the English NHS were born and qualified overseas.[ii] Indeed, the NHS, and the wider UK economy, have been dependent on migrant labour to fill job shortages for decades and the causes of this are structural. I.e. deeply embedded into how we have chosen to run and organise our NHS and economy.

The key concept to understanding this is that form follows function, in other words the outcome we see now (a dependence on migrant labour) is due to the functions/processes that were put in place years or even decades before. A good example of this concept is obesity. No individual becomes obese overnight – it is the body’s natural response to less physical activity, stress, and a diet high in ‘sugar’. With these changes the body adapts to survive by producing more insulin to store the excess sugar safely as fat. Gradually these functions/processes lead to obesity (the form).

In the case of obesity, much effort is expended trying to change the form (obesity) without changing the underlying functions/processes that caused it – a good example of this are crash diets which are unsustainable in the long-term. The harder, but effective, approach would be to focus on the functions/processes that led to obesity in the first place through say, increasing physical activity or changing diet. Identifying the functions/processes allows you to predict the outcome/form and work out how to change it.

So how does this apply to the NHS and UK economy? With the NHS the form/outcome we have is a service heavily reliant on migrant labour and agency staff to fill gaps. In recent years at least, this is due to the functions/processes of cost restraint. That is, under austerity, the primary aim of the NHS has been pushing cost-effectiveness to its limits. This has led to an underinvestment in building works and limiting access to treatments. But critically, for a NHS where 70% of funding is spent on staff, there have been pay freezes, increased workloads, and not enough training places. For example, current spending on training and development for NHS staff is a mere third of its 2014/15 value.[iii] Unsurprisingly due to these functions training and retaining sufficient domestic health workers hasn’t worked. Which leads to its continued reliance on migrant labour and agency staff (the form).

Whilst this explains the NHS’s recent reliance on overseas staff, to understand why this has stretched back for decades we need to look at the structure of the UK economy as a whole. A recent paper found that compared to other developed countries, the UK relies more heavily on migrant labour because it is a ‘liberal market economy’ (e.g. fewer employment protections, less regulation, and more low-wage jobs) and has a ‘consumption-led growth model’ (i.e. household spending and population growth drive economic growth more than exports).[iv]

Firstly, weakly regulated job markets prefer highly flexible workers, but British workers are less flexible due to the financial and time costs of moving towns and the lock in of the benefits system. This gap creates a demand for more flexible migrant labour. In addition there is a skills gap: businesses are more cost competitive in deregulated markets, meaning that firms are not cooperating and pooling resources enough to train domestic workers up. Instead they rely on skilled migrant workers to fill up labour gaps – essentially free-riding on other countries’ and companies’ training costs. The construction industry is a good example of this, with a high demand for skilled migrant labour, because the widespread use of sub-contracting and self-employment has led to little interest in training up British workers.[v]

The NHS has been guilty of free-riding too, with 28% of UK-based doctors trained internationally. This is in line with other developed Anglophone economies. For nurses, 1 in 7 of the total number of registered nurses trained in another country and there has been a growing, cyclical, reliance on overseas recruitment.iii But the reasons for its reliance are different. Workforce planning is hard as changes in technology and demography can alter the need for different specialities, whilst political decisions can suddenly mandate an increase in the scope or speed of access to NHS services, thus requiring more staff. Even before the establishment of the NHS there were staff shortages in hospitals, and following its creation the size of the medical workforce increased by 30% in England between 1949 and 1958.ii The NHS’s function to provide a health service for all of society necessitated a rapid expansion in staff numbers, and hence immigration from the Commonwealth (the form), because training health staff takes years.

One solution to the difficulty of workforce planning is to train up more staff than anticipated, and re-train or ‘export’ those who can’t be employed. The alternative is to train what is anticipated and use migrant labour to temporarily (or permanently) fill any shortages.

The NHS has generally opted for the latter, and in the last two decades this has been exacerbated by a “boom and bust” model of workforce planning. Between 1999 and 2005 the NHS’s workforce grew by 24% to achieve its main objective of improving access to care.[vi] The speed and scale of this meant that significant inflows of migrant labour were needed (the boom). However, by 2006 the financial consequences of this rapid increase in staffing numbers were overspends, and so posts were frozen and training budgets sharply cut (the bust). This saved money, but without a consistent increase in trained domestic staff it meant that during the next staffing boom the NHS would have to rely again on migrant labour to fill the gaps. The willingness of migrants to work in the NHS has allowed workforce planners to be complacent, and led to a lack of alignment between domestic policies and international recruitment. Politically, this situation has been allowed to continue as any negative coverage of unemployed domestic doctors and nurses is considered worse than calls for more skilled immigration to fill vacant posts. For example, the Willink Committee in 1957 decided to cut medical student numbers to avoid over-production and so subsequent Health Ministers, including notably Enoch Powell, enthusiastically led overseas recruitment campaigns.

Secondly, low levels of collective wage bargaining also make it easier for companies to offer low paying jobs which aren’t attractive to domestic workers. In the UK, around 20% of jobs are low paid (paid less than two-thirds of gross median earnings) versus 8% in Denmark.[vii] This is the case in social care, where austerity imposed by underfunded Local Authorities indirectly puts pressure on working conditions, making it even less attractive to British workers.[viii] The NHS’s position as the largest, and sometimes only, employer has allowed it to suppress wage growth for healthcare staff (sometimes below international rates), which had also pushed domestic staff to emigrate or leave the NHS.

Thirdly, as an economy we rely heavily on household spending and rising house prices to fuel economic growth. Exports are only 30% of our GDP, versus 47% in export-led Germany.[ix] In addition, population growth is above average and this drives economic growth as it leads to more being consumed. So any reduction in either household spending or population growth (immigration accounts for half of this) negatively affects our debt-driven consumption-heavy economy.

With the above three categories of functions driving the structure of our economy (and NHS), it becomes easy to see why we are so dependent on migrant labour for both our job market and current model of economic growth (the form).

Even aside from the possibility of Brexit and popular support for less immigration, the OECD predicts that there will be greater international competition for medical staff over the next twenty years due to there being fewer people born in younger age groups.[x] This means that we need to become a country, and NHS, less reliant on the generosity of migrants and the countries and health systems which pay to train them. It is also clear why pronouncements to cut migration to the tens of thousands without altering the structural drivers for migrants is the same as a crash diet for the obese – unsustainable without more fundamental change.

If we wish to reduce our reliance on increasingly rare skilled labour, we need to focus on changing the functions at work in our economy and NHS. This will require a larger role for the state in terms of workforce regulation, and more serious investment by the NHS and domestic firms in training and retaining staff. It will take many years to enact, and we will still need migrants to fill short-term gaps as they arise. Only if we value our workers seriously will we be able to sustainably reduce our reliance on migrant labour, both in the NHS and wider economy.

 

[i] https://www.longtermplan.nhs.uk/publication/interim-nhs-people-plan/

[ii] http://www.historyandpolicy.org/policy-papers/papers/immigration-and-the-national-health-service-putting-history-to-the-forefron

[iii] https://www.health.org.uk/publications/reports/a-critical-moment

[iv] https://doi.org/10.1093/ser/mww026

[v] https://www.research.manchester.ac.uk/portal/files/36923740/FULL_TEXT.PDF

[vi] https://publications.parliament.uk/pa/cm200607/cmselect/cmhealth/171/171i.pdf

[vii] https://blogs.lse.ac.uk/politicsandpolicy/to-be-less-dependent-on-immigration-britain-must-change-its-model-of-capitalism/

[viii] https://doi.org/10.1177/0958928711433654

[ix] https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS

[x] https://www.who.int/hrh/migration/looming_crisis_health_workforce.pdf?ua=1

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About the author

Vivek Kotecha

Vivek Kotecha

Vivek is CHPI's Research Manager. He has previously worked as a manager in Monitor and NHS Improvement analysing and reporting on the operational and financial performance of the provider sector. Prior to that he worked as a management consultant at Deloitte for 4 years. Vivek holds a BSc Economics (Hons) from the LSE, a MSc Economics, and is a chartered accountant.See all posts by Vivek Kotecha