NHS Finance

10.05.16

Majority of NHS efficiency savings will need to be delivered locally, says Stevens

The majority of the £22bn efficiency savings the NHS needs to make by 2020 will need to be delivered by local health economies rather than from the centre, NHS leaders have said.

In an appearance before the Health Select Committee yesterday, Simon Stevens, chief executive of NHS England, said that of the £21.6bn savings needed to meet changing demands on the NHS, £6.7bn would be nationally delivered and £14.9 would be delivered locally.

Jeremy Hunt MP, the secretary for health, who appeared alongside Stevens, was challenged by MPs over the government’s promise of £8.4bn in the spending review, which MPs said really represents just £4.5bn of new money because of inflation and an adjusted baseline.

Hunt admitted that there would be shortages in health service funding because the government had prioritised achieving the Five Year Forward View.

“I recognise that we are talking about £8bn that was needed for NHS England to deliver the Forward View, and that in order to deliver that we have had to make some difficult efficiency savings in the rest of the budget,” said Hunt. “So I do recognise that we didn’t protect the entire health budget, but our determinant as to whether this was sufficient was what NHS England felt they needed in order to put in place the Forward View, and yes, we are making some very challenging efficiency savings in the non-NHS England part of the budget.”

He added that the NHS could achieve these savings by making “smart efficiencies” that would improve patient care.

Stevens said the NHS had set a target of 2% or even 3% efficiency savings every year by 2020, which he said was “stretching but not unreasonable”.

Stevens admits parity of esteem may not be achieved until 2020

When asked how financial pressures on the NHS would affect its targets such as achieving parity of esteem between mental and physical healthcare, Stevens replied that parity might not be achieved until 2020.

He said: “There are a lot of things that, if money were no object, we’d love to do them instantly, but frankly we’re going to have to phase ourselves over the next three, four, five years. A lot of the headline objectives, they are looking at 2020, and quite a lot of the improvement will have to occur at the back end, not the front end of that period.”

An NHS Providers report, published yesterday, found that the government has failed to meet its promises on increasing funding in order to achieve parity of esteem.

In a technical note explaining their rationalisation behind savings, submitted to the committee, NHS England also said that £3.7bn of the £21.6bn was already secured.

Stevens also said he couldn’t yet answer when asked if he was confident that the agreed NHS budget was sufficient.

The British Medical Association called the government “crippled by denial” about the scale of the NHS’ financial problems at a special representatives’ meeting last week.

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