Progress in making NHS efficiency savings: report, together with formal minutes, oral and written evidence

Document type
Corporate author(s)
Great Britain. Parliament. House of Commons. Committee of Public Accounts
Date of publication
22 March 2013
House of Commons papers. Session 2012/13; HC 865
Health Services
Social welfare
Material type

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The Department of Health (the Department) has estimated that the NHS needs to make efficiency savings of up to £20 billion in the four years to 2014-15. This should allow the NHS to keep pace with the growing demand for healthcare and live within its tighter means. The Department reported that the NHS made savings of £5.8 billion in 2011-12, virtually all of that year’s forecast of £5.9 billion. The Department expects that by the end of 2012-13 the savings made will total £12.4 billion.

The NHS appears to have made a positive start but the Committee cannot be fully confident in the savings figures reported. At local level primary care trusts measure and report savings in different ways. For example, the often significant costs associated with generating savings are not consistently taken into account in reporting the savings achieved. Using national data the Department can substantiate only £3.4 billion of the savings reported for 2011-12.

Most of the savings to date have been achieved through freezing the pay of NHS staff and reducing the prices paid for healthcare. The more challenging, and risky, part of the efficiency drive requires transformation in the way health services are actually provided. Over the four years to 2014-15, such transformational changes are expected to generate 20% of the total savings, but the Department expects that by the halfway stage - the end of 2012-13 - just 7% (£875 million) of savings will have been generated in this way.

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