Budget spells tougher times for the NHS

Kings Fund Chief Executive Niall Dickson commented yesterday that the 2009 Budget must be a ‘wake up call for the NHS’, forcing it to improve efficiency before spending cuts of £2.3 billion are introduced in 2011. But as a consequence of Darling’s announcement yesterday, NHS Hospital Trusts are expected to reduce the length of patient stays in hospitals after operations in order to cut costs, and the Department of Health’s (DoH) will also claw back savings by cutting the NHS tariff, the price paid to Trusts for each clinical procedure carried out. This will mean hospitals undertake the same number of operations at a lower cost, or potentially, perform fewer operations. Neither cost cutting measure constitutes an ‘efficiency’, however broadly one defines the word.




Quite apart from what this might mean for patient care though, we’ve already seen the DoH’s attempts at ‘efficiency’ drives. Take for instance the £20 billion Connecting for Health scheme, which was doomed to failure before it’s even got off the ground. Or the system designed to allocate junior doctors to hospital training positions, but which completely failed, exposing many junior doctors to an embarrassing leak of their personal data. Both schemes were intended to bring about efficiencies, but both have only succeeded in bringing embarrassment and greater costs for the taxpayer. It will be interesting to see whether DoH is able to successful implement these cuts (for that is what these ‘efficiencies’ effectively are) without affecting the quality of front line services.




 At the same time, local councils are being asked to save £600 million. Talk of service cuts or redundancies will no doubt follow. But as the TPA highlighted with the Town Hall Rich List earlier this month, too many Council staff are paid over-inflated salaries; would it not be better to start clawing back money through making cuts these unwarranted pay packets? Both local councils and the NHS should look to improve efficiency and save money through making real cuts to the costs of their administration, to the red tape and generous pay of top end managers, rather than pinching the budgets of front line health services.




As a footnote, Reform’s pre-budget paper on cost-savings highlights the savings that could be made through cancelling patronising campaigns such as ‘Change4Life’, and the entirely bureaucratic costs of the Strategic Health Authorities. In a similar vein, the Daily Mail today highlighted a cut in managers and administration that could save up to £3billion in the NHS.

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