News / MPs urge clear plan on transformation savings

By Seamus Ward

The Department of Health and NHS England should publish a ‘clear plan’ setting out how service transformation will deliver efficiency savings over the coming years, according to Commons public accounts committee chair Margaret Hodge.

Speaking as her committee published a report on progress on the £20bn of efficiency savings required by 2014/15, Ms Hodge said the MPs were not convinced the two bodies were doing enough to help the NHS transform services.

Progress in making NHS efficiency savings said most of the savings to date had been achieved by freezing pay and reducing the tariff. But the NHS was entering a more challenging, and risky, part of the efficiency drive where more must be achieved through transformational change.

Over the four years to 2014/15, these are expected to generate 20% of the total savings, but the Department believed that by the halfway stage – the end of 2012/13 – just 7% (£875m) will have been generated in this way.

‘They should set out a clear plan for delivering the level of savings required from service transformation, including how they intend to use financial incentives to encourage NHS bodies to work together,’ she said.

Transformational change often meant consolidating services in one hospital or moving services into the community, which could lead to department, or even whole hospital, closure. Local resistance was understandable, but the Department had to make a clear case, highlighting the benefits in terms of quality, safety and cost savings, to dispel public fears.

‘Unless this is done urgently, the Department will continue to face resistance to change and the NHS will struggle to deliver the savings it needs,’ she said.

The Department reported that the NHS made savings of £5.8bn in 2011/12. The MPs said the health service appears to have made a positive start, but they did not have full confidence in the figures because primary care trusts measured and reported savings in different ways. For example, the costs associated with generating savings were not consistently taken into account. Using national data the Department can substantiate only £3.4bn of the savings reported for 2011/12, the report said.

And Ms Hodge added there were concerns that in some areas savings were being achieved by rationing access to some treatments.