News / Ridley: efficiency ‘muscle memory’ starting to return

Mr Ridley (pictured) praised the finance function for its role in delivering significant efficiencies in 2022/23 and for delivering a tight financial position in the face of very significant service and financial pressures. Referring to the often-used analogy of delivering NHS financial balance being like landing a jumbo jet on a postage stamp, he said 2022/23 had ‘probably been the smallest postage stamp we’ve had for a very long time’.

Despite this, he said the service had delivered some significant achievements – including reductions in long waits for acute services, a 21% increase in urgent cancer assessments compared with pre-pandemic levels and more than 100,000 people treated in virtual wards.

The NHS experienced ongoing pressures from Covid – with an average of 5,811 beds occupied by someone with Covid-19 per day – and industrial action. In the face of these pressures, systems overspent by £534m – just 0.4% of total planned spending. And this was within an overall underspend for NHS England of £148m (0.09% of total spending).

‘There has been a remarkable effort across the service to deliver a financial position and we have attempted to use every pound we’ve got to the benefit of the public,’ he said. ‘It has been really tight, though, and a really challenging year financially. And we know the year we have started now – 2023/24 – is at least as challenging.’

He said that the service’s ability to continue to deliver savings and improve productivity would be key to continuing to meet performance and safety standards. He praised the ‘enormous effort’ to deliver efficiencies across the service last year.

He said the NHS delivered a record level of savings in the year, although the £4.98bn delivered was a slight under-delivery compared to plans of £5.67bn. The biggest shortfalls in delivery related to planned workforce savings and particularly reductions in temporary staff bills. But he said providers had faced significant pressures in this area. Vacancy rates were a full percentage point higher than pre-pandemic, requiring rotas to be filled with bank and agency staff. And he acknowledged that in-year, non-recurrent allocations, for example to support winter pressures, inevitably needed to be spent on temporary staffing.

‘That is one of the reasons why we are doing everything we can in the current financial year and going forward to make allocations as early as possible and to make them recurrent wherever possible, because it allows you to plan on a better basis,’ he said.

There was also under-delivery against efficiency schemes related to procurement. But Mr Ridley said that some of these had been undermined by extremely high levels of inflation. And some attempts to rationalise bed capacity had been made more difficult with higher levels of A&E attendance and higher average lengths of stay in non-elective beds.

He said the delivery of nearly £5bn of efficiency was ‘testament to everyone’s efforts’, although the current year would be even more challenging. ‘But we saw over the course of last year, people moving back more into what this used to be like,’ he said. ‘In the period of the Covid pandemic, where we were focused on other priorities, we probably lost a little bit of our cycles of CIP assurance and development and lost a little bit of our operational muscle memory. Last year, we started to see people moving back to the more day-to-day momentum around efficiencies and that will absolutely be needed going forward.’

Mr Ridley said that systems were key to delivering all the service’s objectives and he said there had been good progress in the nine months since integrated care boards were established. He said that there needed to be recognition that not all systems were alike, with significantly different sizes and backgrounds across the 42 newly established areas. But he said there were significant opportunities that could be realised both from the scale of ICBs and the ability to work at place level.

He added that the best systems were now describing the system position as more than just an amalgamation of organisation positions, with pressures now described as system challenges. And he said that in the most mature systems, mutual aid and support were starting to feel embedded.