By Lucy Phillips | 11 August 2011
The NHS made good progress in reducing its costs in 2010/11 but efficiencies could be harder to find in coming years, a report from the Audit Commission has found.
The report, NHS financial year 2010/11, published today, found most primary care trusts saved almost 2% of their total operating costs and hospital trusts saved more than 4% of their gross expenditure.
The total efficiency savings reported by PCTs and hospital trusts amounted to £4.3bn. Most were made through improving clinical productivity and reducing workforce costs.
The auditors said this was ‘good progress’ towards meeting the £20bn target of savings to be made by 2015.
However, they warn that funding is being squeezed and the targets for 2011/12 are ‘more ambitious’. And, given that 25% of the savings achieved last year came from one-off measures, the money would need to be found again in future years, they add.
The watchdog says the health service’s overall financial performance was good in 2010/11, with PCTs, strategic health authorities and trusts achieving a total surplus of £1.5bn. Only nine out of 276 organisations did not balance their books, although another 16 required some support to do so.
Andy McKeon, managing director of health at the Audit Commission, said: ‘It is impressive that the NHS overall performed so well financially last year, even if some organisations struggled. But there is no room for complacency. Tighter funding, and the need to continue to improve services and implement reforms will make the next three years much tougher.
‘NHS organisations will need to make a determined effort to find further recurrent savings while continuing to deliver high-quality services.’
Responding to the report, the NHS Confederation warned that pressures would increase in future years. Deputy director of policy Jo Webber said: [NHS leaders] are worried that this could be the calm before the storm. Many of our members have told us they are expecting the financial situation facing their organisations to be the worst they have ever experienced.
‘The real test will be over the next 18 months. We need to support NHS leaders to make tough decisions on changes that deliver the right services for patients. We need politicians to get behind plans for new approaches to improving local services that have the best possible care at the top of their agenda.
‘Without this support, services will struggle to change and improve, and patients will be the losers.’
