NHS 'substantially achieved' management cut target last year

In June last year the government announced steeper management cuts and published a revised operating framework, which said primary care trusts and strategic health authorities “will need to save at least £222m in 2010-11 and a further £350m by the end of 2011-12” from management.

DH Resource Accounts for 2010-11, published today, say PCTs and SHAs have reported total reductions of £158m in commissioning management costs, and £54m in provider management - a total of £212m. The accounts say: “The combined effort of the provider and non-provider elements in SHAs and PCTs substantially achieved the 2010-11 target.”

Meanwhile, the accounts also reveal the DH has scrapped a previous estimate of the cost of its overhaul of the NHS, acknowledging there is “continued uncertainty” over the sum.

However, a revised impact assessment of the Health Bill, taking account of the high profile changes to the bill, will be published on Thursday and “will present a range of possible values”.

In February, following publication of the bill, the DH earmarked £2.5bn which could be spent in implementing the reforms, particularly in redundancy payments. However, the DH’s 20010-11 resource accounts say this “was not required”.

They state: “Following the recent pause in the passage of the Health and Social Care Bill through Parliament, it is the department’s judgement that any potential revised financial impact of the government’s reform programme in both the NHS and DH itself, which results from the department’s response to the recommendations made in the NHS Future Forum’s report, is not sufficiently advanced or certain in scope to allow the robust estimation of a provision.

“Consequently, the department has not included a provision in respect of transition costs in the core department accounts within these consolidated financial statements.”

They say that, “given the continuing uncertainty in terms of value and timing of transition costs”, the department has instead recorded a “contingent liability” in relation to the reforms.

The accounts add: “Following its response to the recommendations made in the NHS Future Forum’s report, the department is due to publish a revised impact assessment relating to the Health and Social Care Bill on 8 September, and this will present a range of possible values…

“Given the degree of continued uncertainty, the department has not disclosed a provision in respect of the costs of reform within these financial statements.”

Meanwhile, the accounts show the department underspent by £968m against its budget in 2010-11 mainly because of NHS organisations’ surpluses. The previous year’s underspend was £1.4bn.