After lockdown raided the savings of hairdresser and gym instructor Lucie Wilby, a lengthy wait for a hip replacement dealt another blow to her family’s finances.

“We’re in a lot of debt because of it and that’s a combination of Covid and obviously surgery [and] waiting times,” the 53-year-old mother from Cornwall says.

“If I hadn’t had to wait six months, we’d be nowhere near this issue.”

Like many of the 6.6 million people on an NHS waiting list, work had become painful and eventually impossible for Wilby as the backlog in treatment forces people to cut their hours or stop employment altogether.

“By the time of the operation, I was barely walking and I’m self employed,” she says.

“It took about three years to get diagnosed. That’s one of the major problems – it’s not just the waiting time for the operation once you’re on the list, it’s the waiting time for diagnosis.”

While tax cuts and even trans issues may have stolen the limelight in the Tory leadership race, the struggle to get a grip of record NHS backlogs post-Covid is having a huge economic, as well as human, cost.

Britain’s economy has become the “sick man” of Europe in a very literal sense as hundreds of thousands of people are kept out of the workforce by record waiting lists that could top 10 million and deepen widespread staff shortages.

An extra 378,000 people have left the job market since the pandemic struck in a deterioration that is almost unique to Britain in Europe.

Of these economically inactive people, an additional 201,000 are out of work due to long-term sickness as NHS backlogs build and long Covid lingers.

Jeremy Hunt, the Conservative MP and Britain’s longest serving health secretary, says the crisis is “definitely the worst in our lifetimes”.

“The question we have to ask is, why is it that we’re spending broadly the same as France and Germany, and yet both those countries have many more doctors per head than we have?” he says.

“For sure, if people can’t go to work because of long Covid, that will be holding back economic recovery.”

Widespread staff shortages are being exacerbated by a healthcare system unable to cope with backlogs and the legacy of Covid that is stopping many from seeking jobs.

While most countries have seen employment levels quickly return to pre-pandemic levels, there remains a big hole in the UK’s sickly workforce. Britain has seen the biggest increase in economic inactivity among its workers in the G7 as it is hamstrung by an NHS that experts say is understaffed, underfunded and stretched by the crisis in social care.

By contrast, Germany, Spain and France all have bigger workforces than before Covid. The shortages in the UK have only worsened a summer of discontent where strikes and price surges have reigned, and the issue cannot be ignored, says Tony Wilson, head of the Institute for Employment Studies.

“To address these inflationary risks, these wage pressures, the tightness in the labour market, the risk of shortages and so on, we’ve got to raise participation in work,” he says. Britain is not working – and resurrecting the crumbling NHS is the medicine the economy needs.

'Bigger, badder, nastier'

A hand-scribbled notice hoisted in A&E revealed the near breakdown of hospital care in Greater Manchester last month.

“There is currently a 40+ hour [wait] for a medical bed,” the sign at Bolton Royal Hospital’s A&E read, with the number of hours underlined in red ink.

“There are six beds only left throughout the entire hospital. We have no beds/cubicles in A&E due to no movement.”

The notice told patients to speak to staff if they needed to leave to stock up on food, drink or medication to make it through the near two-day wait for a free bed.

Bolton is not even the most stretched part of Greater Manchester, where NHS waiting lists are the worst in the country. Almost 17 in 100 people in Stockport are waiting for NHS treatment, more than in any other part of England, according to data from LCP. In nearby Salford and Manchester, the figure is 15 in 100.

Up and down the country, horror stories have emerged of elderly patients being kept on trolleys in corridors for days, ambulances not reaching heart-attack victims for hours and multi-day stints in waiting rooms across the country.

This is summer, typically the quieter period for healthcare services. NHS bosses are growing deeply pessimistic imagining the winter ahead.

Fiona Noden, co-chair of the Greater Manchester elective care reform and recovery board, admits: “Long waiting lists for hospital treatment are likely to be with us for some time and we understand this will be a worrying time for anyone waiting for treatment.

“We are prioritising those with the greatest need and who have waited the longest.”

The numbers waiting for treatment on England’s NHS elective care waiting list have soared 50pc since Covid struck to 6.6 million, adding more than two million in just two years.

However, the record backlogs are not expected to ease just because Covid is fading into the background. Experts and politicians blame an array of problems for the UK’s performance gap with other European countries.

Britain had a more unhealthy workforce going into the pandemic. Its worse social care crisis is causing a feedback loop that puts more pressure on the NHS. The UK has lower healthcare capacity than other countries after budgets were restrained in the post-2010 austerity era, making it difficult to work through backlogs. And structural problems within the NHS are also blamed – with some MPs pointing the finger at efficiency issues.

Nigel Edwards, chief executive of the Nuffield Trust, says: “If you look at Germany and the Netherlands, they bounced back – as far as we’re able to tell – significantly more effectively.

“They’ve got more doctors, they’ve got more capacity. The Netherlands doesn’t have more beds but it does have much better homecare, so it can empty its beds much more easily than we can.”

Layla McCay, director of policy at the NHS Confederation, adds on the UK’s lagging performance: “The state of people’s health and wellbeing going into the pandemic certainly has played a role in that.”

The Institute for Fiscal Studies estimates that the waiting list is likely to top 10 million while the National Audit Office expects the number will increase to between seven million and 12 million by early 2025.

Backlogs had already grown in the run-up to the pandemic and then Covid devastated the capacity of the NHS to deal with normal services, causing huge delays to treatment and operations.

But many Britons also did not come forward for care during the pandemic, meaning there is even more pent-up demand for the system to deal with.

“It’s almost like a horror movie where there’s a bigger, nastier version of the monster that emerges in the sequel after you already got terrified by the original version,” says David Maguire, analyst at the King’s Fund, a healthcare think tank.

“The word 'crisis' was being used even before the pandemic. There were already more than 4 million people on the elective waiting list before the pandemic happened. What we’re seeing now is a bigger, badder version of what existed before that time.”

A number of key metrics show a health service in a state of collapse, as many turn to the private sector to avoid the queue.
The average waiting time has risen from 7.5 weeks to almost 13 while the share of patients waiting more than 13 weeks has jumped from 17pc to 37pc.

The average response time for a category 1 incident, such as cardiac arrest, has increased from 7.18 minutes in 2019/20 to 08.39 in 2021/22, according to the NHS.

Times for category 2, covering serious conditions such as strokes and heart attacks, have almost doubled from 23.50 minutes to 41.17 minutes. For the two bottom categories, ambulance response times are twice as long at 2 hours and 13 minutes and almost 2 hours and 50 minutes, respectively.

NHS bosses are deeply pessimistic about the healthcare system holding firm through the winter months when demand typically increases. McCay, says: “If it feels a bit like winter-style pressures right now in August, then once we have what is predicted to be a Covid upsurge and a potentially particularly bad flu season, then things could become even more pressured as we head into winter.

“I think that people are quite anxious about what they’re facing in the next few months.”

Cascading failures and a full-blown staffing crisis have brought the NHS to its knees as crumbling services have knock-on impacts on each other. Problems in social care are making it more difficult to free up hospital beds while a lack of access to primary care is worsening health problems further down the line.

McCay warns that the problems are all connected. “It’s very difficult to discharge people when they’re ready to be discharged if they need social care or community care support and those are not available due to capacity issues,” he says.

“That means that fewer people can then be brought in for their next procedures or from the A&E department, which is leading to more waiting lists and backup.”

Meanwhile, NHS staff absences remain well above pre-Covid levels and doctor numbers have gone backwards despite government targets to boost them.

Experts fear it has become a vicious circle where doctors and nurses under severe pressure from shortages are quitting, worsening the strain on those still working. The NHS is parachuting in St John Ambulance charity volunteers to man ambulances as response times soar well above their targets.

Edwards at the Nuffield Trust adds that there is a “major social care workforce problem” as hospitals struggle to discharge patients due to a lack of capacity in social care.

“I drove past my local McDonald’s the other day who had a huge sign that says hiring in and then there’s a list of places,” he says.

“Everyone is looking for relatively low-paid staff who could work in social care, but might choose not to if there’s something else.”

Sick man of Europe

“What’s actually working well in Britain in 2022?”, Jacob Rees-Mogg was asked on the parched grass outside Parliament this week.

“Our Test cricketers didn’t do too badly against New Zealand,” the Brexit opportunities minister quipped before duelling the TalkTV presenter over whether education, transport and the NHS are functioning properly in the post-Covid UK.

The problem of worker shortages has its fingerprints on many of these economic frictions, making everything from taking a train to finding staff far more difficult.

The healthcare crisis and the country’s economic ills are colliding in what experts fear is becoming a vicious circle that sucks up ever more resources. Louise Ansari, national director of Healthwatch England, the patients’ watchdog, says: “The biggest reasons why people leave work – one is to be a carer for somebody else and the other is because they’ve got a health condition.

“It’s absolutely integral to support people to have good health and to support people, including whilst they’re on a waiting list, to get into work if they can.”

The UK has suffered a jump in its economic inactivity rate – the share of the working age population without a job and not seeking work – from 20.5pc to 21.4pc since the start of the pandemic. Of more concern is the fact that the figure continued to rise during 2021 even as the economy bounced back from the Covid recession.

A total of 2.3 million people are out of the workforce due to long-term illness. It means a bigger share of the UK population is now out of work compared to Germany, which is a reversal of the situation before the pandemic. While economic inactivity has risen in the UK, it is falling across most of the developed world.

In Germany it has fallen from 22pc to 20.5pc, overtaking the UK, while it has also dropped in Australia, Canada, France, Japan and Spain.

Many of the economic frictions in the UK, from inflation to industrial strife, are linked to an ultra-tight jobs market. These shortages are also hampering efforts to deal with the healthcare backlogs, with more than 100,000 vacancies in the NHS itself.

Amarjot Sidhu, UK economist at BNP Paribas, estimates that the UK workforce is about 1pc below pre-Covid levels. He warns that the impact of migration and long-term illness have “had a far more pronounced impact in the UK than in the eurozone and US”.

As well as causing a deterioration in public services, staff shortages are fuelling inflation as unemployment falls to the lowest levels for almost 50 years and power shifts towards workers.

Businesses and the public sector have a smaller pool of workers from which to take talent and that is driving competition for staff.

Stronger bargaining power is leading to faster pay growth, which hit 6.2pc year-on-year in the three months to May when bonuses are included. That is making the Bank of England’s job to stamp out the highest inflation for 40 years even more difficult amid fears of a dreaded wage-price spiral developing.

Workers waiting for treatment will also be less productive and do fewer hours, experts warn. Wilson from the IES says: “One of the consequences of having high rates of ill health isn’t just that we’ve got more people out of the labour force, it’s that people in the labour force are working slightly fewer hours and are probably a bit less productive.

“There’s just a ton of economic, social, fiscal and business reasons why we should be doing better on helping people with health conditions, not just to get into work and stay in work, but also to be productive at work.”

It is not just the people waiting for treatment that have been forced to sideline work. Many have given up employment to care for relatives as they await treatment and social care services are stretched to breaking point.

“It’s almost like we’re on 24/7 care really, to be on alert for any phone calls or anything,” says Sue Stenton – who had to go private for social care. Stenton – who was a property manager in Scotland – says looking after family members has “taken over daily life”.

“No employer would put up with me having to have so much time off to care for them.”

Steff Bannister, a 24-year-old from Rossendale, has been forced to delay her entry into the workforce after a hip replacement. Charity Versus Arthritis estimates that six in 10 people with osteoarthritis say they could be forced to retire early and a fifth have reduced their hours.

“It’s been near enough a year since I’ve been on the waiting list,” says Bannister, who had her operation in June. “I’ve not been able to do my social work studies, which ultimately means it’s going to take longer to qualify and get a job.”

As Britain tries to repair its public finances following the pandemic debt binge, the NHS is becoming a major drain on resources.

The Government is already raising £18 billion from the 1.25 percentage point increase in National Insurance to fund NHS backlogs and social care. But experts say NHS backlogs are likely to suck up most of the money with the IFS saying the NI hike will need to double by as soon as 2025 to tackle the twin threats.

The NHS is the single largest item of public spending and the Office for Budget Responsibility has warned that more money for the crisis risks adding to government spending, which is already at its highest sustained level since the 1970s.

Any more money announced would be on top of the £13 billion boost already outlined in last year’s Spending Review. The next Prime Minister will also immediately face a decision on whether to top up the healthcare budget as inflation and higher pay rises erode the amount of money available.

Hunt, who served as health secretary from 2012 to 2018, warns there “will be less capacity in the system for tackling the backlog of operations” if the NHS has to absorb higher costs from wage rises.

“This is the very, very difficult judgement call the next prime minister is going to have,” he says.

The medicine for Britain’s workforce and NHS will be costly but experts say it is not just a case of throwing money at the problem. While New Labour slashed lengthy waiting lists in the late 1990s and 2000s through a concerted push to boost resources, the challenge is seen as far greater this time.

Easing staffing shortages is seen as the most important problem to resolve while some believe the NHS needs to prioritise the most urgent treatments.

Lord Warner – who served as a health minister for almost four years in Tony Blair’s government – says the NHS should focus on cancer over less serious problems.

“If you’re asking me what we do now, it’s cancer, elective surgery, partnership and diagnostics with the private sector and some kind of deal with private nursing home providers on more capacity.”

Hunt says: “There is a massive issue around efficiency and it’s partly because we’ve never invested properly in antiquated IT systems.

“We waste money on short-term backfilling of staff posts because we haven’t been training enough of them in the first place… The biggest waste is that we spend £6 billion a year on locum doctors and agency staff.”

There will be a “stampede to go private” if the problems are not sorted, says Hunt, who recently wrote Zero, a book on tackling the NHS’s post-Covid problems. He says funding holes could be eased by making the NHS the “Silicon Valley” of health by teaming up with the private sector, similar to during the pandemic.

“What I would be exploring is the incredible opportunity that we have with our life sciences industry working together with the NHS.”

The biggest crisis the NHS has ever faced has been conspicuous by its absence in the Tory leadership race. But the next Prime Minister could be forced to act as backlogs are expected to peak in 2024 shortly before the next scheduled general election.

While Rishi Sunak has admitted that the Tories will be “toast” at the next election if backlogs are not fixed, NHS bosses have accused the two candidates of failing to appreciate the unfolding crisis.

Wes Streeting, Labour’s shadow health secretary, expects the NHS backlogs will be a “key battleground at the next general election” but says the leadership race is happening in a “bubble” aimed at Tory members.

“Unless there’s recognition of the fundamental problem in the NHS, which is a lack of staff, there’s no hope of actually fixing the crisis,” he says.

“What concerns me is that in the Conservative leadership contest, we’ve had barely any mention of the NHS.”

Huge NHS backlogs will loom over the next election. Failing to tackle the crisis will come at a cost to the economy – and the new Prime Minister.