The Darzi investigation: what you need to know

Overview         

Political context                                                                          

The Independent Investigation of the National Health Service in England has been ordered by the Secretary of State for Health and Social Care to provide a definitive view of NHS performance and inform the government’s upcoming ten-year plan for health, expected in spring 2025. The investigation has been led by Professor Lord Darzi, a surgeon and former health minister, who now sits in the House of Lords as an independent peer. He also led a similar review in 2008, leading to the report High Quality Care For All.

The full scope of Darzi investigation has been to:

• provide an independent and expert understanding of the performance of the NHS across England and the challenges facing the healthcare system
• ensure that a new ten-year plan for health focuses on these challenges
• stimulate and support an honest conversation with the public and staff about the level of improvement that is required, what is realistic and by when.

While this investigation can be seen as a political move, by defining key challenges within NHS operations and setting a baseline from which the Labour government hopes to improve, it is the broadest report on the state of the NHS commissioned by the government for some time. The process for this investigation has been under a relatively short time frame, with the announcement of the review only being made public on 11 July. 

To prepare for this investigation, Lord Darzi submitted an unconventional call in the British Medical Journal to the health and care sector for data, intelligence and analysis to help inform the ‘diagnosis’ of the challenges in the NHS. The NHS Confederation was actively engaged in the review, submitted evidence, and our chief executive Matthew Taylor was asked by Lord Darzi to lead one of the review's engagement sessions. 

Investigation areas of focus

The investigation looked first at the performance of the NHS and then at the key drivers of that performance. 

It prefaces its assessment by acknowledging that the state of the NHS should not be seen as due entirely to what has happened within the service, but as linked to severe deterioration in the health of the nation. This includes the increase in the absolute and relative proportion of citizens’ lives spent in ill-health and decline in many of the social determinants of health such as poor-quality housing, which has resulted in increasing health inequalities and rising demand for healthcare.

Assessment of performance of the NHS

• Waiting times

  • Between March 2010 and June 2024, the elective waiting list has grown from just over 2.4 million to over 7 million and those waiting more than a year is up from 20,000 to more than 300,000. 
  • As of June 2024, over 1 million people were waiting for community services, including more than 50,000 people who had been waiting for over a year. 
  • By April 2024, about 1 million people were waiting for mental health services. There were 345,000 referrals where people are waiting more than a year for first contact, and 109,000 of those were for children and young people under 18.
  • Accident and emergency departments are under unprecedented pressure. In May 2024, just over 60 per cent of people attending a type 1 or type 2 A&E were seen within four hours and nearly 10 per cent are now waiting for 12 hours or more.

• Quality of care and outcomes

  • For the most part, once people are in the system they receive high-quality care, but there are areas of concerns, such as maternity care.
  • Despite some recent progress in early diagnosis and improvements in survival rates, cancer care still lags behind other countries and the 62-day target for referral to first treatment has not been met since 2015.
  • Improvement up to 2010 in the cardiovascular disease mortality rate for people aged under 75 has since stalled and rapid access to treatment has deteriorated. In terms of inequalities, in 2022, people under the age of 75 living in the most deprived areas of England were more than twice as likely to die from heart disease than people living in the least deprived areas. 
  • The report quotes the research finding by the NHS Confederation Mental Health Network’s Medical Directors Forum and the Royal College of Psychiatrists that excess mortality for those with serious mental illnesses has been increasing since 2015-16.

• Moving care closer to home 

  • While the NHS strategy is to shift resources to the community, the data demonstrates a trend indicating the opposite. 
  • Between 2006 and 2022, the share of the NHS budget spent on hospitals increased from 47 per cent to 58 per cent. Both hospital expenditure and staffing have grown faster than the other parts of the NHS and numbers in some out-of-hospital services have declined. 
  • The report indicates that too many people end up in hospital due to underinvestment in the community, pointing to the almost 16 per cent fewer fully qualified GPs than other high-income countries (OECD 19) relative to population and between 2009 and 2023 the number of mental health nurses working in the community fell by 5 per cent.
  • The accessibility of community pharmacy is referred to as ‘one of the great strengths’ of the health service with the potential for it to deliver more value-added services. However, reduced spending has led to increasing closures and too few resources in the places where it is needed most.
  • The report highlights research by the NHS Confederation that spending in primary and community settings had a superior return on investment when compared with acute hospital services.

• Productivity and flow

  • Despite the increase in acute hospital staff and expenditure, the number of appointments, operations and procedures has not increased at the same pace and so productivity has fallen. 
  • There are 7 per cent fewer daily outpatient appointments for each consultant, 12 per cent less surgical activity for each surgeon, and 18 per cent less activity for each clinician working in emergency medicine.
  • The report puts this down to patients no longer flowing through hospitals as they should, linked to underinvestment in capital and social care.

Four interrelated drivers of performance 

• Austerity in funding and capital starvation

  • The 2010s were the most austere decade since the NHS was founded, with revenue spend growing around 1 per cent in real terms. Adjusted for population growth and age structure changes, this means it virtually flatlined. 
  • Despite a promise of a 3.4 per cent a year real-terms increase for five years in revenue spending in 2018, it has actually increased at just under 3 per cent a year in real terms between 2019 and 2024.
  • The investigation also emphasises that the UK has had chronic underinvestment into capital compared to international counterparts. The shortfall of £37 billion could have prevented the backlog maintenance of over £11.6 billion, modernised technology and equipment and paid for new hospitals. 
  • The result is described as a missed opportunity to prepare the NHS for the future, improve productivity and embrace the technologies that would enable a shift in the model from ‘diagnose and treat’ to ‘predict and prevent’.
  • The public health grant since 2015/16 has suffered cuts, diminishing the ability for local public health teams to deliver preventative services such as  smoking cessation and sexual health 

• The impact of the COVID-19 pandemic and its aftermath

  • The investigation suggests underinvestment led to higher bed occupancy and fewer doctors, nurses, beds and capital assets than most other high-income health systems, meaning the UK entered the pandemic with low levels of resilience.
  • Further, the NHS delayed, cancelled or postponed more routine care during the pandemic than any comparable health system. For instance, between 2019 and 2020, hip replacements in the UK fell by 46 per cent compared to the OECD average of 13 per cent.
  • The COVID-19 pandemic also led to a significant increase in the need for mental health services.

• A lack of patient voice and staff engagement

  • Patient satisfaction with services has declined and the number of complaints has increased, while patients are less empowered to make choices about their care. The NHS is paying out record sums in compensation payments for care failures, which now amount to nearly £3 billion or 1.7 per cent of the NHS budget.
  • The report describes a drop in what it refers to as ‘discretionary effort’ across a range of roles between 2019 and 2023. This refers to the number of unpaid hours over and above the contracted hours and the investigation infers from this data that NHS staff are burnt out following the pandemic. 

• Management structures and systems

  • The investigation is critical of the Lansley reforms, effective from 2013, which set about a reconfiguration of the structure of the NHS. These reforms resulted in the creation and abolition of several arm’s-length bodies including NHSX, NHS Improvement and NHS Digital, the former of which the investigation suggests destabilised the system through continually changing the landscape. It also led to significant amounts of management capacity being stripped out. 
  • The report highlights the impact of a growth in the number of staff in NHS England, the Department of Health and Social Care and other national bodies with regulatory or policy influence on the system, which confuses accountability and leads to local leaders spending significant time on internal management activities rather than looking out to their local communities.
  • The report notes that the number of staff in NHS statutory bodies with ‘regulatory’ type functions has doubled over the last 20 years, while the number of providers has halved. This, the investigation suggests, has resulted in a system that is over administrated. It also judges that the Care Quality Commission (CQC) is not fit for purpose, as revealed by a recent review.
  • The report supports the Health and Care Act 2022, which put integrated care systems on a statutory basis, and the change in improvement philosophy from competition to collaboration. The investigation concludes that any top-down reorganisation of NHS England and ICBs would be neither necessary nor desirable. However, it also points to further considerations around the variation in the understanding of ICBs’ roles and responsibilities, and the need to refresh the effectiveness of the framework of national standards, financial incentives and earned autonomy.

Analysis  

Overall, we welcome this independent investigation and support that the report positions the performance of the NHS within the changing and challenging external environment it has operated in over the last few decades. It acknowledges not only underfunding of the NHS and interrelated services such as public health, but also the deterioration in the health of the nation, declines in many of the social determinants of health, substantial structural change and aftershocks of the pandemic. 

We are pleased to see the report accepts the majority of the propsals we put to an incoming government prior to the election and acknowledges:

1. that any further top-down structural reform in England would be damaging and lays the groundwork for a plan to put the NHS back on track, expected within the first 12 months of parliament
2. shortcomings in NHS capital spending on estate and digital technology have hindered productivity
3. the NHS needs to shift to provide more care closer to home, with a proportional increase in preventative investment upstream into primary care, mental health and community based services
4. the impact of the social determinants on health / health inequalities and that we are becoming a sicker and less productive society, which the government will aim to address through its health and growth missions.

Although the report does not rule out that there are opportunities for improvement, it clearly concludes that the reason why the NHS is in critical condition is not a failure of NHS staff or management. It goes on to offer some of the clearest illustrations yet of the key systemic and structural issues beyond leaders’ control that if perpetuated will continue to set the service up to fail.

"...despite spending over half our budget on hospitals, we have not invested in creating a healthy ecosystem for them to operate in"

One of these is the growing focus of the NHS budget and staffing on hospital-based care the report evidences, alongside factors that reinforce this distribution. Namely, performance standards focused on hospitals, not primary care, community services or mental health, single-year budgets and politically driven short-term funding decisions that hamper innovation and transformation. The investigation also helpfully illustrates that despite spending over half our budget on hospitals, we have not invested in creating a healthy ecosystem for them to operate in. This is both within hospitals, which have seen underinvestment in capital, hindering their ability to deliver efficiently and effectively, and lack of investment in primary, community and social care services that keep people out of hospital and enables them to be safely discharged when ready to leave. 

Although this conclusion is one that will be familiar to health leaders, this independent investigation is one of the most definitive assessments of the fact that we are driving investment into an operating model that is becoming more unsustainable and inefficient, at the same time as offering a poor experience to patients and staff. 

As the NHS Confederation, we continue to advocate to government for a shift towards more integrated, preventative care closer to home. In our formal submission to the Darzi investigation, we highlighted data from a recent member survey demonstrating that ICSs are committed to shifting resource closer to home but are struggling to make progress due to financial and operational pressures. We are pleased to see this sentiment reflected in the investigation findings, acknowledging the ambition exists, but the operational reality makes achieving it a challenge.

"ICB leaders have shared concerns that they are being handed more responsibility without being given the levers and tools needed to deliver"

The investigation’s call for evidence found conflicting accounts of the definition of population health and the ways in which ICBs interpret their duty to improve it. While we believe each ICS should be given discretion to take tailored approaches to address the differing needs of their local populations, ICB leaders have shared concerns that they are being handed more responsibility without being given the levers and tools needed to deliver. Further national direction is required, for example a national framework for measuring prevention spending.

The report’s indictment of the CQC as not being fit for purpose resonates with healthcare leaders’ experience. As Penny Dash’s ongoing review indicates, the CQC faces significant operational challenges. The report also highlights broader problems with the oversight and accountability regime which system leaders will recognise. We often hear that an overly complex and at times duplicative oversight regime distracts attention from recovery and transformation and confuses accountabilities. We welcome the report’s call for reform of the performance management framework to clarify the role of ICBs in provider oversight and will continue to work closely with our ICB members and NHS England to ensure its upcoming oversight framework provides such clarity.

In addition to some of the structural upheaval the investigation points to, we welcome the spotlight on several significant current issues: under-investment, staff experience and management.

"We will be pushing strongly for more capital investment at the Spring Spending Review to begin the process of making up for the £37 billion shortfall identified in this investigation"

On investment, although the report rightly points to broken promises around revenue funding it is the lack of capital investment, not only in hospitals but across all services, that is emphasised as a central driver of performance. This is something we have long called for the government to address and we will continue to make the case for capital investment. Having these facts clearly articulated brings attention to the experience of our members working under intense financial constraints and being asked to deliver more, with less. We will be pushing strongly for more capital investment at the Spring Spending Review to begin the process of making up for the £37 billion shortfall identified in this investigation. 

We hear from members that these financial challenges are inhibiting new ways of working and operating models, as finances are being used for day to day firefighting of operational pressures in place of transforming services. For example, the report rightly highlights the effect of falling productivity on their enjoyment of work and as a distraction from being able to focus on achieving better outcomes.

On management, we strongly welcome the investigation’s findings that the NHS is undermanaged. This is something the NHS Confederation has been shining a light on for some time. ‘Manager-bashing’ has attracted some media attention during the election campaign and we hope this independent investigation finding will underline that the NHS requires more, not fewer, managers to operate effectively. 

Finally, it is noteworthy that the scope of the investigation was focused on the NHS, noting only at a high level the impact of social care not having been resourced and valued sufficiently on health. The implications for the ten-year health plan are still unknown, but there certainly will be a clearer baseline for the existing situation in health compared to social care thanks to the investigation findings. The investigation makes several references to shifting care upstream and closer to home, and we know that close partnership with social care is key if there is to be a meaningful step change. 

Looking ahead, the investigation provides a helpful baseline to which the upcoming ten-year health plan for reform can respond. We welcome the recommendations (see next section) but note that much of it points to concerted change required. We recommend a considered, supported and funded approach to avoid repeating the lessons of past reforms, which are so clearly demonstrated in the report.

Next steps

The Darzi investigation provides a coherent analysis of the challenges facing the health and care system. Leaders across the NHS and wider system are working hard to recover following years of austerity and a global pandemic. They are embedding new, more collaborative ways of working and shifting towards models of care critical to stabilising the health and care system and improving outcomes. They support the government's reform agenda, which focuses on shifts towards care closer to home, prevention and digitisation. 

Ten-year health plan

The government's upcoming ten-year health plan provides an opportunity to look at the entire health and care system to deliver these shifts. However, healthcare leaders are clear that they will need support from the government to support short-term recovery and longer-term transformation, from additional capital funding for estates and digital technologies to a settlement for social care and financial and regulatory incentives, in particular to support a shift of resource into primary and community care.

The report identifies a list of important themes for how to repair the NHS to be considered for the forthcoming ten-year health plan, due in spring 2025: 

• Re-engage staff and re-empower patients to harness staff talent and passion and enable patients to take as much control of their care as possible.
• Lock in the shift of care closer to home by hardwiring financial flows to expand general practice, mental health and community services.
• Simplify and innovate care delivery for a neighbourhood NHS to embrace new multidisciplinary models of care.
• Drive productivity in hospitals by fixing flow through better operational management, capital investment, and re-engaging and empowering staff.
• Tilt towards technology to unlock productivity, particularly outside hospitals, as the workforce urgently needs the benefits of digital systems, use of automation and AI and for life sciences breakthroughs to create new treatments.
• Contribute to the nation’s prosperity by supporting more people off waiting lists and back into work. 
• Reform to make the structure deliver by clarifying roles and accountabilities, ensuring the right balance of management resources at the right levels and strengthening key processes such as capital approvals. 

At the NHS Confederation we will work closely with the Department of Health and Social Care and NHS England to influence the drafting of the plan. We will ensure the plan commits to the most effective solutions to the challenges faced in the NHS, and members’ experiences, expertise and best practices are heard and used to shape the work. 

In addition to the areas identified by the investigation and listed above there are a number of other opportunities we hope the ten-year health plan will cover, including the role of the health and care system in the devolution agenda; achieving parity of esteem between physical and mental health; reforming regulation so it is fit for purpose and incentivises system working, integration and improvement; and developing holistic support for developing leadership development and improvement capabilities across the health and care system.

We encourage members to engage with their relevant member networks to ensure their voices are heard in our influencing of the ten-year health plan.