Progress in making NHS efficiency savings: Chair's statement

13 December 2012

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

The NHS is facing a four-year £20 billion squeeze that demands unprecedented levels of savings. Against a target of £5.9 billion for 2011-12, the Department reported that the NHS achieved efficiency savings of £5.8 billion. This sounds like welcome progress, but over 30 per cent of these savings lack any kind of independent assurance to provide Parliament and the public with confidence that they present a true picture.

What also emerges from this report is that the ‘low hanging fruit’ - the easiest savings - have already been harvested. The NHS will have to search deeper and wider for future efficiency savings. Fundamental service transformation is vital to unlocking savings, but progress to date is underwhelming.

The Government must ensure that the drive to cut costs does not compromise patient safety or quality of care. While, according to this report, overall quality indicators held up in 2011-12, I am aware that the Department’s own publicly available figures suggest that things have started to get worse. For example, they show that since April this year the number of people waiting for more than four hours in A&E has risen to half a million, compared to 432,000 in the same eight-month period last year. Data from the Care Quality Commission also shows that 16% of the hospitals inspected in 2011-12 were understaffed.

The Department is trying to reduce demand for acute services, but this must not lead to the NHS shutting the door to patients. Alternative provision must be in place to ensure that all patients wherever they live have access to appropriate care to meet their needs.

The Department must carefully monitor the impact of ‘demand management’ to ensure that healthcare is not being rationed and I am astonished that it does not yet have a mechanism in place for doing so. The NAO’s recommendation that the NHS Commissioning Board consider establishing national access policies should be taken seriously by the Department.

The road ahead for the NHS is steep. While the NHS may have registered a surplus in 2011-12, this disguises the financial woes of 31 Trusts and Foundation Trusts in deficit and on life support from the Department. The need to pump money into these failing Trusts is the mark of an unsustainable system that is struggling to square growing demand with the scale of efficiency savings required.

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