By Richard Staines
21 June 2010
The government has continued its crackdown on NHS management costs with the launch of a revised operating framework for the current financial year.
Strategic health authorities will be expected to slash management costs by around £850m from the current spend of more than £1.85bn to just over £1bn by April 2014.
SHAs and primary care trusts will determine how this is managed, with major reductions expected in the next two financial years.
They will be expected to save at least £222m in 2010/11 and a further £350m in 2011/2012.
A freeze on new consultancy, marketing and IT spending is to be managed by a new efficiency and reform group.
Overall, SHAs and PCTs have been told to end this financial year with an aggregate surplus of £1bn.
Health Secretary Andrew Lansley said: ‘Management costs in primary care trusts and strategic health authorities have increased by over £1bn since 2002/03, with over £220m of the increase taking place during 2009/10.’
He added that it was the government’s intention to get back to 2008/09 management costs by the end of this financial year.
‘Then in subsequent years, we will go beyond that, with a further £350m reduction in 2011/12. The overall reduction in management costs by 2013/14 will be £850m, which is a 46% reduction on 2009/10.’
Chris Ham, chief executive of health think-tank the King’s Fund, said that while cutting management costs was a ‘bold move’, improving efficiency in the NHS would ‘not come primarily from cutting the waste of managerial overheads’.
He added: 'Given the NHS faces a shortfall of up to £21bn a year, improving productivity at the front line will have the most impact. It is therefore vital that the NHS continues to invest in its leaders, to engage frontline clinical staff in improving care quality and efficiency.'
The revised framework will also use the existing payment by results scheme to reward trusts’ with excellent performance and penalise poor performers.
Tweaks to the system will be introduced later this year in target areas, including cardiac rehabilitation.
Other changes include an end to the performance management of the 18-week referral to treatment target by the Department of Health’s new rules on reconfiguration of services.
The framework changes also stipulate that the four-hour accident & emergency waiting time target applies to only 95% of patients, instead of 98% – a development welcomed by medical and nursing organisations.
Another target axed in the document is the 48-hour GP access target introduced by the Labour government.
Dr Laurence Buckman, chair of the British Medical Association’s GP committee, said: ‘Patients must always be treated as individuals and we welcome this commitment to allow doctors the freedom to do what is clinically appropriate.’
21 June 2010
The government has continued its crackdown on NHS management costs with the launch of a revised operating framework for the current financial year.
Strategic health authorities will be expected to slash management costs by around £850m from the current spend of more than £1.85bn to just over £1bn by April 2014.
SHAs and primary care trusts will determine how this is managed, with major reductions expected in the next two financial years.
They will be expected to save at least £222m in 2010/11 and a further £350m in 2011/2012.
A freeze on new consultancy, marketing and IT spending is to be managed by a new efficiency and reform group.
Overall, SHAs and PCTs have been told to end this financial year with an aggregate surplus of £1bn.
Health Secretary Andrew Lansley said: ‘Management costs in primary care trusts and strategic health authorities have increased by over £1bn since 2002/03, with over £220m of the increase taking place during 2009/10.’
He added that it was the government’s intention to get back to 2008/09 management costs by the end of this financial year.
‘Then in subsequent years, we will go beyond that, with a further £350m reduction in 2011/12. The overall reduction in management costs by 2013/14 will be £850m, which is a 46% reduction on 2009/10.’
Chris Ham, chief executive of health think-tank the King’s Fund, said that while cutting management costs was a ‘bold move’, improving efficiency in the NHS would ‘not come primarily from cutting the waste of managerial overheads’.
He added: 'Given the NHS faces a shortfall of up to £21bn a year, improving productivity at the front line will have the most impact. It is therefore vital that the NHS continues to invest in its leaders, to engage frontline clinical staff in improving care quality and efficiency.'
The revised framework will also use the existing payment by results scheme to reward trusts’ with excellent performance and penalise poor performers.
Tweaks to the system will be introduced later this year in target areas, including cardiac rehabilitation.
Other changes include an end to the performance management of the 18-week referral to treatment target by the Department of Health’s new rules on reconfiguration of services.
The framework changes also stipulate that the four-hour accident & emergency waiting time target applies to only 95% of patients, instead of 98% – a development welcomed by medical and nursing organisations.
Another target axed in the document is the 48-hour GP access target introduced by the Labour government.
Dr Laurence Buckman, chair of the British Medical Association’s GP committee, said: ‘Patients must always be treated as individuals and we welcome this commitment to allow doctors the freedom to do what is clinically appropriate.’
