News / Efficiency plan a priority to achieve £22bn savings

Ms Charlesworth (right) was responding to a briefing from NHS England, which breaks down the estimated £22bn of efficiencies needed by 2020/21. The briefing, written for the Commons Health Committee, said local NHS services will have to deliver £15bn in efficiency savings.

Conventional provider productivity would deliver about £9bn of these local efficiencies – indicating a 2% annual efficiency requirement for providers each year.

Activity-related efficiencies, such as care redesign, would deliver £4bn; £1bn had already been secured from non-NHS providers and clinical commissioning group running cost reductions. A further £1bn would come from other commissioning efficiencies.

With the aggregate underlying provider deficit some £1bn higher than anticipated, providers would have to make extra savings. As the higher deficit was in part due to agency staff use, NHS England is assuming providers can achieve at least a £1.2bn reduction in agency spending this year. The £7bn of national savings would come from areas such as the 1% pay cap and reducing NHS England central budgets and admin costs.

NHS England insisted most of the reductions were not cost reductions but actions to moderate spending growth.

The briefing outlines central modelling of NHS funding needs up to 2020/21. These include how the £30bn funding gap was calculated and the funding required based on three scenarios. In the first – 0.8%, mirroring the NHS average productivity gain – funding of £21bn would be required. In the 1.5% efficiencies scenario, £16bn would be required. The spending review opted for 2% average efficiencies, implying an efficiency requirement of £22bn.

Ms Charlesworth pointed to the need for £15bn of local savings. ‘But by its own estimate, the NHS delivered savings of just £1bn towards this last year, confirming that the health system is substantially off target with its efficiency plan. At its heart this reflects fundamental weakness in the approach to efficiency in the NHS – too much reliance on one-off savings,’ she said.

‘What is now crucial is a comprehensive plan with clear accountability for how these savings can be achieved in reality. Patients and the public also need assurance these savings will be genuine efficiencies, not simply reductions in quality.’