NHS reforms hold back efficiency savings, say MPs

17 Jan 11
The drive to make the NHS more efficient has been put at greater risk by the government’s planned restructure, MPs said today.
By Vivienne Russell


18 January 2011

The drive to make the NHS more efficient has been put at greater risk by the government’s planned restructure, MPs said today.

A report from the Commons health select committee notes that the NHS needs to make ‘unprecedented’ efficiency gains if it is to meet rising demand in the current financial climate. The ‘Nicholson Challenge’, named after NHS chief executive Sir David Nicholson, requires the service to find annual savings of 4% from 2011/12. More effective commissioning is clearly one of the solutions, the report says, but the government’s surprise decision to abolish primary care trusts created uncertainty among commissioners and therefore increased both the costs and risks of finding savings.

‘The failure to plan for the transition is a particular concern,’ the committee said.

‘The Nicholson Challenge was already a high-risk strategy and the white paper increased the level of risk considerably without setting out a credible plan for mitigating the risk.’

Commenting on the report, Nigel Edwards, acting chief executive of the NHS Confederation, said it was ‘spot on’ in its analysis.

‘The NHS has been charged with making unprecedented efficiency gains of £15–£20bn over the next four years. The success or failure of the government’s health policies will ultimately be judged by how effectively the NHS manages this challenge,’ he said.

‘We support the government’s objectives of making the NHS more patient-focused and increasing clinical responsibility for decisions about how services are commissioned. But we have to be realistic about the risks involved in the implementation of these policies. Success is possible but the government needs to do more to sell its vision. Real transformation will only take place if staff and patients are on board.’

The report calls on the government to develop a commissioning structure that is both effective and accountable and doesn’t rely on GPs as the sole arbiters of all commissioning decisions.

The report was issued a day before the publication of the Health and Social Care Bill, which will take forward the proposals contained in July’s whitepaper.

Committee chair Stephen Dorrell said: ‘The Health Bill represents a major opportunity to get these policy questions right. The health committee believes these objectives are shared across the political spectrum and will make further recommendations about how they can best be delivered.’

The health reforms came under fire yesterday when they were described as ‘potentially disastrous’ by leading health unions.

In an openletter the leaders of six unions, including the British Medical Association and the Royal College of Nursing, said: ‘There is clear evidence that price competition in health care is damaging.

‘With scarce resources, there is a serious danger that the focus will be on cost, not quality.’

The letter added: ‘The sheer scale of the ambitious and costly reform programme, and the pace of change, whilst at the same time being tasked with making £20bn of savings, is extremely risky and potentially disastrous.’

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