The Department of Health’s overall spending will not be reduced in the current financial year, the Treasury has confirmed.
Chancellor George Osbourne today announced £6.2bn would be saved from government spending during 2010-11, but none would come from the DH.
Health will have to make additional efficiency savings but they will be reinvested within the department.
The Treasury announced a recruitment freeze “across the civil service for the rest of 2010-11” and said there would be “draconian” scrutiny of all spending on consultancy, IT and advertising. Savings will also come from property, procurement and civil servants’ travel and quangos.
These will apply to the DH but its reductions in “wasteful” spending will be reinvested in “frontline services”. It is thought decisions on which quangos will be reduced or abolished will be made by individual departments.
The coalition government has repeated the Conservatives’ pre-election commitment to increase health spending in real terms each year.
Today the Treasury additionally said spending on the Sure Start programme, which is not part of the DH budget, would be protected during 2010-11.
A new board, the Efficiency and Reform Group, led by the Treasury and Cabinet Office, is being created to oversee savings.
It will implement freezes on “ICT spend above £1m”, “all new advertising and marketing spend”, “all new consultancy spend unless it is an operational necessity”, and “civil service recruitment, except in important frontline and business critical areas, and significantly cut the number of temporary staff”.
The group will review large government projects to reduce or stop them, renegotiate supplier contracts, and cut civil service expenses including first class travel and government cars.
It will also review civil service pay, subject new property leases and extensions to Treasury approval and “simplify HR functions across Whitehall”.
Chief secretary to the Treasury David Laws, who will chair the new group with cabinet office minister Francis Maude, said it would lead “quite draconian control” of spending.
“Unless we send out a shockwave through departments we won’t get the step change we expect,” he said.
A DH statement following the announcement said: “The DH and NHS funding for 2010-11 are unaffected by today’s announcements.
“However, like all departments, we need to go further in delivering additional efficiencies in 2010-11 in order to reinvest in service priorities for improving outcomes for patients. This includes savings that will be delivered from the cross-government efficiency measures announced today. Further details will be set out in the budget.”