New challenges set for the NHS

New challenges set for the NHS:

21 June 2010  

The NHS will begin to make immediate efficiency savings by tackling escalating management costs .

- NHS must accelerate cuts in management costs -

- Targets removed as focus shifts to outcomes -

The NHS will begin to make immediate efficiency savings by tackling escalating management costs in order to meet the increasing demands on NHS services, Health Secretary Andrew Lansley said today.

A revision to the 2010/11 NHS Operating Framework, published today, sets out changes to key priorities for the NHS including plans to reverse the rise in management costs seen in the last year.

Health Secretary Andrew Lansley said:

'NHS spending will increase, but so too will the demand on NHS services.  In order to meet this demand, the NHS needs to make substantial savings and that is why I want to see immediate action this year to reduce management costs so that the savings made can be reinvested in NHS care for patients.

'Management costs in Primary Care Trusts and Strategic Health Authorities have increased by over £1bn since 2002/03, with over £220m of the increase taking place during 2009/10.

'Management costs now stand at £1.85bn and it’s our intention that during 2010/11 we will remove all the management costs that have been additionally incurred during 2009/10, to get back to the level of 2008/09. Then in subsequent years, we will go beyond that, with a further £350m reduction in 2011/12.'

The overall reduction in management costs by 2013/14 will be £850m, which is a 46 per cent reduction on the 2009/10 management costs.

The revised Operating Framework also sets out for the first time changes to the use of targets in the NHS.  These include:

  • removal of targets around access to primary care
  • removal of top-down performance management of the 18 weeks referral to treatment target
  • reduction of the 4 hour accident and emergency target threshold from 98 per cent to 95 per cent.

Andrew Lansley added:

'I want to free the NHS from bureaucracy and targets that have no clinical justification and move to an NHS which measures its performance on patient outcomes.   Doctors will be free to focus on the outcomes that matter – providing quality patient care.

'But I want to be clear – while the NHS will no longer be accountable to ministers or the Department for its performance in these areas, it will be very much accountable to the patients and public it serves. Patients will still be entitled to rights under the NHS Constitution and the quality of their experiences and outcomes are what will drive improvements in the future.

'We expect providers to continue to make improvements, for example on referral to treatment times, and to provide this information to patients themselves, driving choice and competition in the NHS.'

Today’s revisions also ask the NHS to give greater priority to two important areas, military veterans’ health and dementia.  The NHS must ensure that injured military personnel experience a smooth transition from military to NHS care as well as receiving priority treatment for conditions related to their service. 

On dementia, the NHS must work closely with partners to implement the National Demential Strategy and publish information on how they are doing this so that people with dementia and their families have access to clear information to help them understand local services. 

The changes set out today also reinforce recently announced plans to publish more transparent hospital infection data; new rules on reconfigurations that must have the support of local doctors and patients; and plans to withhold payment from hospitals where patients are readmitted within 30 days of discharge.

Notes to Editors

1.  The Revision to the Operating Framework for the NHS in England for 2010/11 was published on Monday 21 June 2010.

2. The revised Framework includes the requirement for Strategic Health Authorities and Primary Care Trusts to reduce their management costs by £222m this year (2010/11) and a further £350m next year (2011/12) in order to bring costs down to less than £1006m – a third lower that the levels in 2008/09.  This money will be reinvested into NHS services.

3.  The Coalition Government has a commitment to increase health spending in real terms each year of this Parliament.

4.  On 21 May 2010, the Health Secretary announced new rules for service reconfigurations in the NHS. 

5.  On 2 June 2010 the Health Secretary announced plans to publish more detailed and frequent information on Healthcare Associated Infections.  From 5 July the HPA will publish data every week to increase transparency and drive improvement through patient choice. 

6. In a speech to patients on 8 June 2010 the Health Secretary set out plans to withhold payment from Trusts where patients are readmitted within 30 days of discharge. 

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