We all know that the public sector tends to spend our money inefficiently and the NHS is probably the greatest example of this. The TPA wonks have been busy crunching the numbers and the findings are truly staggering. Productivity growth averaged a measly 0.28 per cent from 2015 to 2019.
But what does this mean when comparing the NHS with other systems? For the amount it spends, the UK does not have the level of healthcare resources that would be expected, ranking just 12th of 13 comparable countries. For all of us that have tried to use NHS services recently, this does not come as a shock.
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So why is the health service so inefficient? In large part itâs due to the NHS spending balance. Capital spending, the money used for investments long term, is often raided to pay for day-to-day spending needs. In most cases, this is bailing out trusts in debt or hiring more staff. While this is good for headlines, it is not the best way to improve productivity.Â
Our policy analyst and author of the report, Shimeon Lee, explains further in CapX:Â âItâs a vicious cycle: low investment drags down productivity, which means you need more staff, leaving even less money for investment. Just look at the most recent spending review, where NHS day-to day-spending grows by 3% per year, compared to 0% for capital.â
In other words, the NHS is very good at spending lots of money without delivering the level of service that we should expect. But how can our politicians get the NHS out of this mess?
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As our head of research, Darwin Friend explained in the Times: âIf the government wants to deliver on its promises, it will need to be far braver than politicians have been and consider changes previously considered unpalatable, including regional pay bargaining, the prioritisation of capital spending and a role for more insurance-based financing. It will also have to face down demands for increased pay, given the disproportionate amount of the NHS budget that is swallowed up by staffing.â
But what does the NHS need to do to improve? Well committing funds to capital investment, actually following through with that investment and more local accountability would all be very welcome improvements!Â
We wonât hold our breaths here in the office that Labour will enact our recommendations, but we will be hoping to see some further steps in the right direction. The abolition of NHS England is a clear sign from the health secretary that accountability for the NHSâ performance lies with him⊠perhaps this could be the start of seeing some smarter decisions being made.
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On this weekâs episode of a nation of taxpayers, our podcast host Duncan Barkes and our head of campaigns Elliot Keck were joined by author and foreign correspondent Jake Wallis Simons.
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They talk about Iran, Israel, media bias and how tensions in the Middle East impact UK taxpayers, giving a unique insight into the events dominating our news coverage of late.Â
Give the latest episode of a nation of taxpayers a listen on Apple Podcasts, Spotify, and YouTube.
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Town Hall Rich List Roadshow - Northampton
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Priding ourselves on our willingness to get outside of London and the Westminster bubble, four of our team went up to Northampton on Wednesday to play a game of âplay your cards rightâ with the locals, with the aim of showing just how much their town hall bosses are paid.Â
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Northampton featured highly on our Town Hall Rich List 2025, with 25 staff receiving over ÂŁ100,000 - that is the joint most in the East Midlands. Unsurprisingly, it was their chief executive who topped the councils' pay tables, receiving a whopping ÂŁ224,000 in 2023-24 alone!
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When asking residents if they thought their council bigwigs deserved it, the team got a resounding (and unsurprising) answer⊠NO! Worsening services, a council that is harder to reach and bosses seeing salaries skyrocket. That is what our team heard in Northampton, and itâs what we hear everywhere else we go, too.Â
Keep an eye out for when we'll be visiting a council near you!
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It is very easy to feel nothing but despair when assessing our current crop of parliamentarians. Wednesday's Energy Security and Net Zero committee's session with the CEO of OFGEM gave us all in the office some hope, however.Â
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Bradley Thomas, the MP for Bromsgrove, showed exactly how MPs should apply the maximum level of scrutiny to quangos. Picking up on an earlier TPA investigation on staff networks, he asked the CEO of OFGEM, âI want to give a couple of examples, âcultural crowns, the art and history of black hairâ, âpride in intersectionality, perspectives from rainbow regulatorsâ against that backdrop how can you justify spending tens of thousands of pounds of taxpayers money on this, particularly when your remit is to regulate electricity and downstream gas markets?â Quite right!Â
Let's hope we see more MPs continue in this vein and challenge quango bosses for wasting taxpayers' money.
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Write to your MP - support the welfare reforms!Â
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Iâm sure that you will all be very painfully aware that the welfare state has ballooned to a size that would seem impossible to imagine just a few decades ago. It is so ridiculously large that even the Labour government is trying to reduce it.
As necessary as this is, though, many of their MPs are rebelling with well over 100 of them signing a âreasoned amendmentâ, a move that would essentially kill the bill. Ministers have already staged a partial climbdown, caving to demands from backbenchers and slashing the expected savings from their already modest proposals.
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At PMQs on Wednesday, the deputy PM, Angela Rayner, confirmed that the government would plough ahead as scheduled with the second reading this Tuesday.Â
It is crucial that MPs know just how important cutting our public spending is. Use our tool to write to your MP and tell them to support the bill.Â
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Councils arenât entirely to blame
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Elliot, used his ConservativeHome column this month to explain how bad legislation is crippling councils. As much as councils are often brilliant at wasting money with no input from the government, Elliot explains that three bits of legislation are placing an unduly heavy burden on our town halls.Â
He says, âIt is also true that local government has been crippled by three relentless assaults on their autonomy from Whitehall and Westminster. They are, in no particular order, the Care Act 2014, the Children and Families Act 2014 and the Equality Act 2010.âÂ
As Elliot explained in the Telegraph a few months back, a Supreme Court ruling on the Equality Act is what ultimately bankrupted Birmingham. It could be a watershed moment in the future of local authorities, as, unlike other councils that had gone bankrupt through gross incompetence, Birmingham failed as a direct result of the ruling. How many more councils will end up in the same situation?Â
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The other two acts are just as damaging for councils, though. They changed the responsibilities of councils delivering SEND and social care services, expanding the age range of those eligible, creating a legal obligation to provide care to eligible residents and standardising care to a national set of rules. This meant individual councils could not raise the threshold of those eligible or adapt the rules to suit their own needs.
Despite the huge expansion of burdens on councils, central government funding was cut. In the case of Birmingham, the bulk of the blame must lie with Whitehall. Elliot didnât let councils completely off the hook, though, stating that tighter budgets mean councils must strive to be more efficient and more streamlined. Rocketing salaries and endless examples of waste hardly endear councils to residents. Â
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Will lower requirements lead to more transparency?
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The National Audit Office (NAO) released a report this week suggesting that reducing the reporting requirements for some government bodies may actually lead to more transparency. Seeming to come straight from the government playbook of âletâs have a bonfire of the quangos while greatly increasing their powers and fundingâ and âlet's unleash growth by hitting a record high tax burdenâ, our researcher Callum McGoldrick was more than a little sceptical in this weekâs blog.Â
As Callum points out, âmany larger public bodies, let alone the smaller ones, have a poor track record of producing annual accounts on time. Many are running with years' worth of delays on account publications.â
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The NAO raises a very valid point, though, it doesnât make any sense for small government departments to have the same extensive accounting requirements as the largest departments, which have teams of hundreds working to get all accounts published.Â
Additionally, small businesses in the private sector have lower reporting standards than large companies. By having a more tailored approach, the public sector is bringing itself in line with the private sector.Â
Callum doesnât think we should stop here, though, saying a major cause of our inefficient public sector is terrible legislation. We should be willing to take bold steps towards getting this legislation off our books. Click here to read Callum's blog in full.
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Benjamin Elks
Grassroots Development Manager
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