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NHS savings reports questioned

17 December 2012

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The government’s spending watchdog has cast doubt over the accuracy and sustainability of the NHS’ reported efficiency savings total so far.

According to the NHS, trusts made a “substantial” amount of productivity savings in 2011-12 and “virtually” hit its forecasted total of £5.9bn.

However, the majority of such savings were said to be generated through “easy” savings avenues such as pay freezes and cuts to back-office costs.

The National Audit Office remains “unclear” as to what level of savings are “sustainable over time”.

It is claimed “limited action” has been taken so far in terms of service transformation in expanding community-based care.

Furthermore, the NAO said there was “limited assurance” that all the NHS’ efficiency savings were achieved, and the body could only substantiate £3.4bn of the £5.8bn reported.

Amyas Morse, head of the NAO, said: “The NHS has made a good start in making substantial efficiency savings in the first year of the four-year period when it needs to achieve savings of up to £20bn. To build on these savings and keep pace with the growing demand for healthcare, it will need to change the way health services are provided and to do so more quickly.”

Matthew Harker, director in Capita’s health consulting business, agreed the “centrally driven approach” to efficiency savings is “unsustainable” and could impact on the quality of care and the overall viability of organisations.
“Local initiatives have focused on tactical savings; trimming patients’ length of stay, reducing follow-up rates in outpatients and raising the thresholds for intervention,” he said.

“However, to drive up the quality of care while improving efficiency also requires fundamental focus on the way in which services are provided rather than purely streamlining them.

“Service transformation has not yet been realised at scale in the NHS. In addition it has not been systematically implemented and, where it has been delivered, takes time to see the benefits of improvements in quality and efficiency of care.”

NHS Confederation chief executive Mike Farrar urged the NAO not to “underestimate” how much hard work has gone in to achieving the efficiency savings thus far and said both the public and politicians must understand and support the need for change.