NHS £20bn savings progress questioned

By Nick Triggle
Health correspondent, BBC News

image captionThe NHS has been set a savings target of £20bn by 2015

Doubts are being raised over government claims the NHS in England is making good progress on its savings target.

The health service has been told to find £20bn in savings by 2015 - 4% to 5% of its budget a year.

But it has been told that this saving must not come from cuts, but instead be made through productivity savings.

Financial results released this week suggested £5.8bn would be saved this year, but experts have questioned the extent of the savings.

The figure - quoted in the 2011-12 quarter three financial results - was hailed as "encouraging" by senior Department of Health officials.

If that level of saving is maintained it will mean the £20bn target is met.

Lack of detail

But Professor John Appleby, chief economist at the King's Fund think tank, said there was a lack of detail about where the savings were being made.

He said it seemed as if ministers were relying on the pay freeze and the cut in money given to hospitals to make a large chunk of the savings.

But he said this could have the effect of not incentivising staff to work as hard as they had done, while for hospitals the cuts could see them deliver services less well.

"These would not be productivity savings, they would be cuts," he added.

He also said the NHS faced a "pretty impossible" job in continuing to make gains in the long-term.

It emerged last week that senior NHS officials are working on the basis that the yearly savings will continue after 2015.

David Stout, of the NHS Confederation, which represents managers, said while the figures were good news they were probably down to the easier savings.

He said the "most challenging" actions, such as major changes to the way hospitals were run, still remained.

But David Flory, deputy chief executive of the NHS, said the financial figures were "encouraging and show the NHS continues to deliver the best care for patients while maintaining a healthy financial position".

But he added: "It is vital that the NHS does not take its eye off the ball - the NHS is performing well to meet future challenges, and must continue to do so."

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