Comment / £400m efficiency potential in corporate services

Almost all trusts (230/236) returned data on their corporate services costs, including finance, human resources, legal, governance and information management and technology. In return, this month they have received an individual report on the cost of their corporate services benchmarked against the rest of the country, their sustainability and transformation plan area and trusts of the same type and size.

They have been asked to use the data to facilitate local discussions to identify areas where collaboration could increase efficiency while maintaining quality. The regulator has offered its help to trusts looking to collaborate. The figures will also feed into the STP autumn progress report – STPs have been asked to examine the consolidation of back office services.

NHS Improvement said that the data return, which covers 2015/16 and includes pay and non-pay costs, showed the service in England spends around £3.2bn a year on corporate services.

There was significant variation in costs – for example, the average cost of producing a payslip was £4.28, but more than 25% of trusts paid more than £5 and some paid nearly £10 per payslip. IM&T and governance offered the greatest opportunities for savings.

While the top 10% of biggest spenders spent £7.50 on average per £100m income on their corporate services, the 10% most efficient trusts spent an average of £2.80.

Smaller trusts spent more – those with an income of less than £300m from patient care spent the equivalent of £5.40 per £100m of income while those with more than £300m spent £3.90.

Jeremy Marlow, NHS Improvement’s executive director for operational productivity, said: ‘The closer you look at the NHS the more you see variation in what things cost and the knock on effect this can have on hospitals and patients is huge.’

NHS Improvement was working closely with trusts to identify the most effective use of resources. ’We want to support trusts to have high-quality, efficient corporate services they can rely on and we are asking them to work together to become more efficient, so that the NHS as a whole can benefit,’ he added.

Health minister Philip Dunne said the NHS is one of the most efficient healthcare services in the world. Even so, the NHS Improvement figures showed significant improvements could be made.

He continued: ‘That's why we are helping the NHS become even more efficient by ending unwarranted variation in how much hospitals pay for the same products and services, increasing transparency and reducing the use of expensive agency staff, so that every penny possible can be spent on frontline patient care.’