MPs concerned by reliability of NHS savings

22 March 2013

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22 March 2013 | Adam Leach

The NHS has made a “good start” in its pursuit of saving £20 billion by the end of 2014-15, but the £5.8 billion efficiencies reported for 2011-12 are “not fully reliable” according to the Public Accounts Committee.

The National Audit Office (NAO) reported in December 2012 the NHS had made savings of £5.8 billion - against a forecast of £5.9 billion - through cutting staff, reducing the cost paid for healthcare services and back office efficiencies.

Responding to the NAO report the committee of MPs said the Department of Health appeared to “have made a good start” but that due to differences in the way the savings are calculated, with some primary care trusts not including costs incurred through delivering the savings, less than two-thirds of the savings could be verified.

Margaret Hodge, chairwoman of the committee and Labour MP, said: “Although the department reported that the NHS made savings in 2011-12 of £5.8 billion, virtually all of that year’s forecast of £5.9 billion, that data is not fully reliable. Only 60 per cent of the savings it claimed to have made during 2011-12 could be substantiated using national data.”

The committee’s report said as the “obvious savings”, such as reducing headcount, had already been made, the department now needs to focus on delivering further savings by changing the way healthcare is delivered. A significant portion of these savings is expected to come through closer collaboration between health bodies, such as moving certain services out of hospitals and into communities. But the MPs raised concerns this does not encourage collaboration, as the transition of services would lead to departments closing in hospitals. It called for the NHS to offer greater financial incentives to motivate collaboration.

A spokesman for the Department of Health, said: “With an increasingly ageing population, we expect the NHS with local government to look seriously at how improvements to care can be made, focusing on better integration, closer to the patient's home. We will respond fully to the PAC in due course.”

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