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DH efficiency savings figures are unreliable, say MPs

The Department of Health’s estimate that £5.8 billion in efficiency savings have been made in the NHS in 2011/12 is unreliable due to PCTs reporting savings in ‘inconsistent ways’, say MPs.

Using national data - for example on staff numbers and activity levels - the DH can substantiate only £3.4 billion of the £5.8 billion savings reported for 2011/12, a report from the House of Commons Public Accounts Committee said today.

They said this was because savings data supplied by PCTs was ‘inconsistent’ and there was no way of checking whether a saving is recurrent or a one-off amount.

It added that the National Audit Office estimated that up to £520 million of the reported savings for 2011-12 were one-offs and the NHS would have to find new replacement savings in future years.

The report said: ‘Just under 60% of the savings reported for 2011-12 could be substantiated using national data. At local level, primary care trusts measure and report savings in inconsistent ways that are not always in line with good practice.

‘For example primary care trusts do not routinely report savings net of the costs incurred in generating them. To enhance confidence in the reported figures, the Department should set out a clear framework, based on simple accepted principles, and require NHS bodies to measure and report efficiency savings against this framework.’

The report added that the the so- called ‘Nicholson challenge’- which asks NHS bodies to make to make a saving of up to £20 billion over the four years up to 2014/15-has led to low staffing levels with ‘damaging effects on the quality and safety of care’ at some trusts and widespread concerns about restrictions on therapies, especially elective surgeries.

It added that the DH is making ‘obvious’ cuts such as restraint in pay rises and restricting access to services instead of reconfiguring services so they deliver quality care more efficiently or redesigning payment mechanisms so that NHS bodies work together.

This follows a report from the Health Select Committee which warned the Government that they could not rely on the present rate of pay bill savings as a sustainable form of efficiency gain.

Dr Mark Porter, BMA chair, agreed that more imaginative thinking in terms of making efficiency savings was need, to prevent trusts opting to cut staff numbers and staff pay and restrict services.

He said: ‘We agree that focusing on quality and safety of care, rather than knee-jerk cost-cutting, is the best way forward in the long-term. Clearly the challenge of dealing with financial pressures is huge, and it will be best addressed if clinicians are involved in decision-making. There needs to be wide engagement on how to tackle the decisions facing many parts of the NHS.’

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Readers' comments (1)

  • Vinci Ho

    In essence , the so called 'efficiency savings'made so far have got nothing to do with efficiency. It was purely a blind cost cutting in expenses of jobs . One could argue some of the jobs were associated with bureaucracy but what is the truth you can see so far, ladies and gentlemen?
    After the Francis Report , perhaps some one in the government should change at the least the NAME of this so called 'challenge'????

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