Huge savings will be made if the policies proposed in the Health and Social Care Bill are fully implemented, claims the Department of Health – but the net savings now predicted are far smaller than those claimed when the Health Secretary first introduced the Bill to Parliament.
The Department says that although the final stage impact assessment of the NHS White Paper Equity and Excellence: Liberating the NHS shows far lower overall savings compared with the previous impact assessment released in January, there are still “significant long-term benefits” from implementing all its policies.
The new impact assessment gives a drastically reduced estimate of total gross savings – down from the £5.2bn predicted in January to £4.5bn now – but it predicts that implementing the Bill’s policies would still generate total net savings of £3.2bn-£3.3bn (compared with £3.8bn net in January).
The latest assessment has revised downwards since January the estimates for redundancy costs and spending on administration during the transition. Total PCT redundancy costs, which were originally estimated to be £768m, are now calculated as £634m. This results partly from a large reduction in the predicted number of total redundancies to be made, from 17,400 to 11,300, achieved by phasing cuts over a longer period to allow for more natural wastage.
Health Secretary Andrew Lansley said: “The revised Impact Assessment shows that the cost of modernising the NHS is only a fraction of the savings which will result.
“We are cutting waste and are still on track to reduce administrative spend by a third. Every penny saved will be reinvested into patient care, delivering significant long-term benefits to patients.
“Our plans, which have been strengthened by the listening exercise, will both safeguard the future of our NHS and move us closer to a health service that puts patients at the heart of everything it does.
“They ensure that future generations can rely on an NHS that is always there, always improving and always free at the point of use, based on need and not ability to pay.”