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Doctors worry over Spending Review Savings

£20 billion cost savings needed by 2014 despite staff ‘working extremely hard’

Jo Carlowe

Thursday, 21 October 2010

Lead doctors have criticised Chancellor George Osborne’s Spending Review for its focus on productivity.

Although the government has kept its pledge to protect health spending in real terms – with the health service receiving a 1.3% rise in funding by 2015, some £20b in efficiency and productivity savings will be sought in the NHS by the end of the parliament.

Commenting on the Spending Review, announced yesterday, British Medical Association Chair of Council, Dr Hamish Meldrum described the Chancellor’s position on productivity as ‘worrying’.

“Although the NHS budget has been relatively protected, the health service has to find cost savings of £20 billion by 2014 and this is already resulting in cuts to services, staff and rationing of treatments,” he said.

He added: “The NHS continues to face the demands of an ageing population and the rising costs of medicines and new technology.

“Cuts in spending in other areas, such as welfare benefits, will also have a knock-on effect on demands on the NHS. Vulnerable groups often have complex health needs and it is essential that help remains available to them.

 “The Chancellor’s remarks about productivity are worrying. Doctors and nurses work extremely hard to care for their patients and will continue to do so despite the challenging times ahead.

“In the last decade the ‘productivity’ of healthcare staff has contributed to reduced waiting times and improvements in the quality of patient care. If the government is truly committed to reducing waste and inefficiency, their proposals for NHS reform should focus less on competition and more on a cooperative approach on delivering healthcare.”

Nonetheless Dr Meldrum said he was pleased that the government had kept its pledge to protect health spending and welcomed the news that spending on NHS research would grow over the course of the spending review.

Dr Peter Carter, chief executive and general secretary for the Royal College of Nursing said the small increase at a time of soaring demand would ‘feel like a cut’.

For health, the government’s Spending Review 2010 for the period between 2011-12 to 2014-15 will include a 1.3% increase in the resource budget, a 17% decrease in capital spending, a reduction in the administration budget of 33% and reinvestment to support the delivery of NHS services. In real terms this means the overall budget will increase by 0.4%.

“We have had to make difficult decisions about where this money is spent and we have to make every penny count,” said Health Secretary Andrew Lansley.

In terms of efficiency savings to be made over the next four years, the Spending Review cited continuous improvement in workforce productivity, the application of best practice throughout the NHS in the management of long-term conditions, driving down inconsistencies in admissions and outpatient appointments and a 33% cut in the administration budget, including a reduction in the number of ‘arm’s length bodies’ from 18 to a maximum of 10 by 2014.

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