Why the NHS is Fundamental to Economic and Social Recovery

Following the UK Government Budget and Spending Review, and as scrutiny of the Welsh Government draft budget 2022-23 continues in the Senedd, discussion continues around the amount of funding the NHS receives, but less around the role of the nation’s healthcare system in local economies.

It’s well-documented that NHS revenue spending accounts for around 50% of the Welsh Government’s budget, currently £9.1 billion, and additional funding has been made available to support the NHS response to the COVID-19 pandemic. However, there is less awareness of the significant contribution the NHS makes to local and national economies as an anchor institution, as well as the significant role it will play in the wider recovery of local economies and communities following the pandemic.

NHS organisations act as anchor institutions, whose long-term sustainability is tied to the wellbeing of the population. 

In the Welsh NHS Confederation’s latest briefing, we aim to raise awareness of the direct and indirect contributions the NHS in Wales is already making to the economy and local communities, including to the health and wellbeing of the population, and recommend how we can go further in making a difference.

On behalf of Members – NHS organisations in Wales – the briefing calls for Welsh Government and local leaders to place health and sustainability at the heart of all national COVID-19 recovery and economic plans. High level recommendations include embedding health and care within national and local regeneration planning, ensuring a much greater alignment between health and care strategies and those relating to wider economic development.

Health, wellbeing and the economy are bound tightly together; a healthy (physically, psychologically and socially) population results in a more economically active population. Interventions designed to improve health, inclusive growth and wellbeing in Wales are in the interests of all local, regional and national partners, businesses and communities, and should be a shared priority. 

The size, scale and reach of the NHS means that it has a significant influence on the health and wellbeing of local populations and could have a key role in actively supporting and driving the nation’s critical economic and social recovery, post COVID-19. As the largest employer in local areas, a key purchaser of goods and services, and a capital estate holder and developer, NHS organisations act as anchor institutions, whose long-term sustainability is tied to the wellbeing of the population. 

As the NHS seeks to reset its services and priorities, it will focus on how it can influence wider community issues in its role as an anchor institution. This includes how its resource allocation and utilisation can support local economic development, influence social and economic determinants of health, impact the environment and climate through reducing its carbon footprint and helping build sustainable communities.

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However, the socio-economic impacts of NHS Wales spread far beyond its economic scale and scope to include wider impacts, including employment stability, above average wages, fair working conditions, career progression, and economic activity rates. Collectively, these factors positively impact Welsh productivity and the economy, with organisations and businesses benefitting significantly from healthier and more productive workforces. In many ways, health can be seen as the ‘new wealth’.

As highlighted in the Cardiff University research, NHS Wales and the Regional Economy, NHS Wales is estimated to support almost 145,400 jobs and £5.4bn of gross value added (GVA). This accounts for 11% of total Welsh employment and 9% of Welsh GVA, excluding important impacts via NHS Wales’ capital spending programme. The research highlighted that every £1bn of direct NHS revenue spending supports an estimated 19,000 total jobs in the Welsh economy.

When it comes to providing ‘good work’ and supporting social mobility, Health Education and Improvement Wales (HEIW) recently undertook a review of pre-registration health education. This resulted in obligations for education providers (post-2022) to make adjustments for students that have experienced challenging circumstances, which are likely to have impacted their previous educational performance, supporting them to access programmes. This includes applicants who have been in care, those who live in areas of high deprivation and those whose own parents are not educated to Higher Education level. HEIW has also created an additional fund to provide enhanced student support to bridge the attainment gap, including pre and post enrolment study skills classes, additional tutoring, counselling, peer support and mentorship.

In terms of the NHS as a purchaser and commissioner for social value, NHS Wales Shared Services Partnership (NWSSP), who provide a range of professional, technical and administrative services to NHS Wales organisations, has been tasked to scope and support delivery of the NHS Wales Executive Board Foundational Economy (FE) Programme. One example of action taken to support better FE outcomes is the inclusion of ‘social value’ criteria within procurements.

The NHS has a unique opportunity to use its resources to influence the wellbeing of the population it serves and reduce the health inequalities that exist in Wales.

On a local level, Hywel Dda University Health Board are developing a procurement strategy which addresses the need to build wealth within their communities through developing opportunities in the local economy. The Health Board’s procurement strategy will supplement the nationally led approach through NWSSP, building partnerships with key local suppliers. The Health Board are in the process of developing a Community Wealth Building baseline assessment, commissioned by the Centre for Local Economic Strategies. The work will develop a whole-Health Board approach to spending, which maximises the opportunities to enhance public value across all pathways of spending – direct spend, contracted spend and procurement spend. 

The COVID-19 pandemic, EU exit and climate change are anticipated to contribute to a future social and economic downturn. The NHS must use the system and partnership approach that emerged during the pandemic to drive up population health and wellbeing. We have a fantastic opportunity in Wales for a more focused ‘health and wellbeing in all policies’ approach to future national and local decision-making, through legislative frameworks such as the Wellbeing of Future Generations Act 2015, Social Services and Wellbeing Act 2014 and the Socio-Economic Duty. We also recognise the NHS has the power and responsibility to influence action on a broader scale, to reduce its contribution to climate change and protect resources for the health of future generations.

There are opportunities for Public Service Boards, Regional Partnership Boards and other innovative local partnerships to consider issues such as workforce and supply chain development, community working, new forms of funding and strengthening population health through prevention and early intervention. 

The NHS has a unique opportunity to use its resources to influence the wellbeing of the population it serves and reduce the health inequalities that exist in Wales. Tackling stubborn inequalities and driving recovery and growth through a renewed focus on health requires bold actions. It means prioritising health in its widest sense: from improving population health to strengthening research and development with industry on health technologies. It means anchor institutions – the NHS, universities, local and combined authorities – working together to co-design our communities, where people want to live, work and invest through engaging communities and other partners on these efforts, but also boosting the role they themselves play as large employers and economic actors (who in turn will benefit from a healthier workforce).

The Welsh NHS Confederation supports its Members to understand and maximise their role as anchor institutions – working in partnership with other health and care organisations and, critically, other local anchors. Together, we can make a huge difference to the health, wealth and wellbeing of local communities during a time of economic and social recovery.

Our briefing, Health, wealth and wellbeing: The NHS’ role in economic and social recovery, examines the importance of the nation’s healthcare system and its role in local economies, putting forward recommendations of how we can go further in making a difference. The briefing includes case study examples from across Wales.

On 30 November and 1 December, the IWA will be hosting a two-day virtual economy summit which will see experts discuss the future of Wales after Covid-19. Register now.

All articles published on the welsh agenda are subject to IWA’s disclaimer.

Nesta Lloyd-Jones is the assistant director at the Welsh NHS Confederation, the membership body representing all the organisations making up the NHS in Wales.

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