Department of Health Spending Review

DoH Press Release on the impact of the Spending Review on health budgets

In line with the Government’s commitment to protect health spending, overall NHS spending will increase by 0.4% in real terms over the course of the Spending Review period. This includes a 1.3% increase in the resource budget, and a 17% decrease in capital spending. The administration budget will be reduced by 33%, and reinvested to support the delivery of NHS services.
The settlement will allow the NHS to maintain the quality of services to patients. The health settlement also includes:

* Additional investment to support social care, rising to £2 billion per year by 2014-15, through the NHS and local government, to break down the barriers between health and social care. This includes funding for reablement, which has shown dramatic benefits in helping people to regain their independence after a crisis and cutting emergency readmission to hospital. This will save money across the health and social care system;
* Expanding access to talking therapies;
* A new cancer drugs fund of up to £200 million a year;
* Funding for priority hospital schemes, including St. Helier, Royal Oldham and West Cumberland; and
* NHS health research spending growing in real terms over the Spending Review.

Some programmes announced by the previous Government but not yet implemented will not be taken forward at this stage, including:

* Expanding free prescription entitlements to people with long-term conditions;
* One to one nursing for cancer patients and a one-week wait for cancer diagnostics, however the Government will set out its review of the Cancer Reform Strategy this winter.

To meet the rising costs of healthcare and increasing demand on its services, the NHS will release up to £20 billion of annual efficiency savings over the next four years, all of which will be reinvested to meet rising levels of demand and to support improvements in quality and outcomes. This will include, for example:

* Continuously improving workforce productivity;
* Applying 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.

In addition to the above, the Department will be adopting the following ideas, suggested by the public through the Spending Challenge process:

* We will no longer require Primary Care Trusts to deliver hard copies of ‘Your guide to NHS services’ to every household. This will generate total savings of £1.5 million to £2.5 million over four years.
* We will increase the use of highly qualified clinical scientists in the NHS to free up doctors to focus on the work that only they can do, as part of the Modernising Scientific Careers programme. This programme will save the NHS in excess of £250 million per year.
* We will encourage the NHS to train radiographers to report on more of the straightforward x-rays in line with best practice so that consultant radiologists are free to assess the more complicated images, CT and MRI scans, saving the NHS an estimated £7.9 million annually.

Alongside these efficiency improvements, the Government is seeking to introduce reforms as set out in the White Paper, “Equity and Excellence: Liberating the NHS”. The proposals will create a long term sustainable NHS by cutting bureaucracy and waste, putting decision-making into the hands of patients and clinicians and building a patient-centred NHS.

Health Secretary Andrew Lansley said:

“The Spending Review reinforces our historic commitment to protect health spending and means that funding for the NHS will increase in real terms in every year of this Parliament. Due to the deficit and the increasing demands on NHS and care services we have had to make difficult decisions about where this money is spent and we have to make every penny count.”

“That is why we have chosen to invest in supporting social care and reablement - honouring our commitment to protect the most vulnerable in our society. And ultimately a better integrated health and care system will mean a more efficient system that delivers savings in the longer term - as more people live independently and are discharged from hospitals sooner.”

“NHS organisations have already started a wide-ranging efficiency drive to make savings that can be redirected into patient care. And we also want to see a 33 per cent real terms cut in the administration budget, saving around £1.9 billion. But that is not enough. The NHS budget will have to stretch further than ever before in these difficult times - and so reform isn't an option, it's a necessity in order to sustain and improve our NHS. The proposals I set out this summer will cut waste and bureaucracy and put patients and doctors in control to build a high quality health service.”

Source - Department of Health

October 2010