News / Baumann calls on service to ‘demythologise’ £22bn savings

The health service must ‘demythologise’ the required £22bn savings, which are to a large extent about more effective use of resources rather
than cost reductions, according to NHS England chief finance officer
Paul Baumann (right).

Speaking to the HFMA annual commissioning conference in June, he said the spending review assumes £7bn of these ‘savings’ will be delivered nationally through wage restraint and other mechanisms.

The 2% annual efficiency requirement on providers would account for £9bn, with much of this achieved through delivery of the Carter report savings. This left £6bn for commissioning, which would be delivered by a combination of local action and national initiatives.

Mr Baumann broke down the £6bn further, with an estimated £4.3bn being delivered through activity-related savings. The RightCare programme is expected to support some £1.7bn of this, with new models of care and urgent and emergency care reform each contributing a further £0.9bn.

‘We need every health economy to grasp each efficiency programme and embed it into their plans for the future through the STP process,’ he said.

Mr Baumann suggested that the end of June deadline for submission of sustainability and transformation plans (STPs) could be extended to ensure they are robust and financially balanced.

But, recognising relationships were better developed in some areas, Mr Baumann said he wanted robust plans that can stand up to external scrutiny.

‘The question is not whether health economy spending can be made to balance within the resources but how,’ he said. ‘We need not to waste each other’s time submitting plans that either don’t balance or assume someone else will come to our rescue locally or nationally with additional resource.

‘It is more of an egg and spoon race than a 100-metre sprint. I would rather have a fully developed and perfectly balanced golden egg in September than a sticky mess on the grass at the end of June.’

He said commissioner plans for 2016/17 were ‘undoubtedly the most risky I have seen in my 10 years in the NHS’. The common financial platform across CCGs had contributed to increasing the ‘financial grip’ on commissioner finances, but the sector needed to improve its intelligence and early warning systems and clear the ‘commissioner-provider fog’.