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Coalition set to increase £20bn NHS efficiency savings target

By Ian Quinn

Health Secretary Andrew Lansley has said the Conservative-Liberal Democrat coalition is set to introduce even greater efficiency cuts in NHS spending than the £15-20 billion already ordered under Labour.

Speaking on BBC Radio 4's Today programme this morning, Mr Lansley, who as health secretary was one of Prime Minister David Cameron's first appointments, said that the increases in spending under the previous Government were ‘not sustainable for the future'.

Mr Lansley renewed the Conservative's election pledge that the party would ‘secure the NHS' by ensuring that resources increased each year in real terms.

However, asked if the Government would match the savings ordered by Labour, he said: ‘That implied about 3% efficiency savings in the NHS. Of course we do need to do that, but we may need to do more because we have increases in demand in the NHS and a need to improve outcomes.'

Mr Lansley said the Liberal Democrats had accepted Tory proposals on health spending, including the promise to ‘ring-fence' real-terms increases in NHS funding every year, which had been slammed in the run-up to the election by new business secretary Vince Cable, who said they were unsustainable.

‘Our mandate was that we would not let the sick pay for Labour's funding crisis – that we wouldn't cut the NHS,' Mr Lansley said, but he added: ‘We are not going to simply accommodate any level of inflation.'

‘It will not protect the NHS from the need to secure efficiency savings and to control pay and prices in the NHS. In the past there has been a substantial increase in pay and prices in the NHS relative to the rest of the economy – I remember about five years ago year-by-year the NHS was seeing its inflation rising by 6% or 7%, while inflation in the private sector economy was rising at around %1 to 2%. That is not sustainable for the future.

‘What is sustainable is that we deliver efficiency savings in the NHS in the same way as the rest of the public sector, but because of the demands on the NHS we can reinvest them into the NHS to deliver improving outcomes or the public.'

He added: ‘People across the NHS cannot expect that it is exempted from the broader pressures… what that doesn't meant is that people in the NHS should get pay rises not available to other public sector workers.'

Labour's target for efficiency cuts was not wide enough, Mr Lansley said Labour's target for efficiency cuts was not wide enough, Mr Lansley said