NHS shake-up ‘imperils’ £20bn savings

By Hannah Brenton

The shake-up of the NHS will put the health service’s £20 billion efficiency drive at risk, according to a report.

The public accounts committee said the risks to achieving the £20 billion efficiency savings set out by the previous Labour government had increased in the face of plans to restructure the health service.

“The Department of Health (DoH) is taking steps to integrate the efficiency plans with the transition to the new NHS model, but it acknowledges that the risks to delivering all of the planned savings have increased in the light of the planned reforms,” the report stated.

“In particular, the one-off costs and disruption of reorganisation at the same time as seeking £20 billion efficiency savings provides an additional challenge to the NHS.”

The committee outlined problems with the government’s ability to assess the “value for money” of the health service during its reorganisation.

The report found the Department of Health had not yet established a framework to deal with hospital failures or a means to keep funding accountable as the service is decentralised.

Margaret Hodge, chair of the committee, said there were inherent risks in the shake-up.

“The Department of Health acknowledged the risks associated with this radical shake-up of the NHS,” she said.

“Whilst the reforms could complement the imperative of achieving £20 billion efficiency gains by 2014/15, the reorganisation might also distract those responsible for making the savings while safeguarding standards of patient care.”

The Labour MP said the biggest risk would be if the reorganisation costs were greater than expected.

“If the department’s estimate of the one-off costs associated with reorganisation turns out to have been too low, it will make the challenge of achieving savings for reinvestment even tougher,” Ms Hodge said.

The DoH estimates the reforms will cost £1.4 billion, offset by a £1.7 billion reduction in administrative spending by 2014/15.

Health secretary Andrew Lansley said the reforms would help the NHS make savings.

“The efficiency challenge and our reforms are inextricably linked,” he commented.

Our reforms help the NHS make savings, because getting rid of tiers of bureaucracy will mean an extra £1.7 billion each year to reinvest in patient care.

“And if we don’t give doctors and nurses the power to make decisions for their patients, then quality of care will suffer. We need to put in place a framework today, to safeguard the NHS for future generations tomorrow.

“We will consider the useful recommendations set out in this report alongside the suggestions we hear as we listen, reflect and improve on proposals.”

The government’s reforms of the NHS would involve an administrative overhaul, scrapping primary care trusts and handing over commissioning power to GP consortia.

But the plans have come under fire from members of the public and the medical profession, prompting the government to launch a ‘listening exercise’ to assuage concerns.

Mr Lansley came under attack in the Commons yesterday, as Labour MPs claimed the government’s ‘listening exercise’ was not genuine.

But the health secretary said the government had organised 119 events and defended the coalition’s plans.

Deputy prime minister Nick Clegg and health minister Paul Burstow will take part in an NHS roundtable event later, while Mr Lansley will visit GP consortia.