The Department of Health will have to contribute £2.3 bn in additional savings, as part of £5 bn “efficiencies in spending” across the public sector in 2010/11, the Chancellor of the Exchequer announced.
The Department’s revenue budget for 2010-11 is adjusted from £104.6 bn to £102.3 bn, but spending will rise by 18% for the period 2007/08 to 2010/11. Health Secretary Alan Johnson said: “Better quality, safe healthcare goes hand in hand with better value for money. Getting it right first time for patients means better care, but also better value for money as it avoids costly follow ups to put mistakes right. For example, our drive to reduce healthcare-associated infections has improved the experience of thousands of patients and has saved the NHS £75 million in the last year.” Savings will be delivered by a package of measures, including the “Public Value Programme”, which looks to making efficiencies across the public service. The Government claims this will enable the NHS to unlock savings of £500 m by building on the “World Class Commissioning” programme; extending and refining the Payment by Results tariff to reward and drive better quality and better efficiency; and rolling out new guidance and driving efficiency improvements in making better use of the existing NHS estate. Commenting on the budget, King’s Fund’s chief executive Niall Dickson said: “The good news for now is that, as planned, primary care Trusts who fund local services will continue to receive cash increases of 5.5% over the next two years. Also, £800 m of the £1.8 bn surplus the NHS has carried over to this financial year will be reinvested in frontline services up until the end of 2010/11.” He added: “Efficiency savings are possible but what is needed are evidence-based measures that help the front line improve the way it uses resources. This should involve looking across health and social care and addressing this as one system so that savings made in one area do not end up increasing overall costs. “Above all, the quality of care patients receive must not suffer. We know that high performance and improved safety can save money. We must use this opportunity to redesign services, focus on improving productivity and delivering better care in the face of rising demand with fewer resources. This could be an opportunity to bring about lasting reforms in the way we deliver care.” Steve Barnett, chief executive of the NHS Confederation, added: “The message for NHS organisations in this budget is clear – the levels of growth seen over recent years are at an end and, despite the relatively strong budget settlement for 2009/10, there are tough times ahead. “Leaders in the NHS will have to use this time to prepare for 2010/11 onwards when the financial outlook is more challenging. If the NHS is to continue to deliver high quality care, in an environment with little or no growth and rapidly rising demand, even more significant efficiencies will be needed. “This must be achieved through innovation, focusing on quality and considering how best to redesign services for enhanced patient care, rather than through salami-slice cuts across the board, which has been the response in the past. This forward planning will require some difficult decisions about priorities and change.”
