Treasury may sell DH’s stakes in LIFT schemes

The development is revealed in an annex to chief secretary to the Treasury Liam Byrne’s report Putting the Frontline First, which set out government plans to find another £3bn in public sector efficiencies by 2011 by merging back office functions, reducing overheads, relocating and cutting civil service staff and selling off assets.

It says the Treasury is “reviewing” the “ownership structure” and central government equity stakes in NHS LIFT schemes.

LIFT schemes are structured such that the local public organisation - usually the primary care trust but sometimes also the local authority - owns 20 per cent of the equity, the DH a further 20 per cent and the private sector 60 per cent.

HSJ has been told options being considered include selling the DH’s stake, formally held by Community Health Partnerships, either to the PCT equity holder or to the private sector. The Treasury believes asset sales could also improve back office and estate efficiencies.

Benchmarking data published with Mr Byrne’s report revealed 13 out of 22 NHS arm’s length bodies have back office costs well above the public sector average.

Among NHS arm’s length bodies highlighted as inefficient is the temporary staffing agency NHS Professionals, which the report says has a sickness absence rate over twice the public sector average at 18.4 days per employee.

The NHS Information Centre and General Social Care Council also had absentee rates well above the average rate at 9.4 days per member of staff.

Both organisations said the benchmarking data was out of date. It was published as the Department of Health considered issuing hard hitting targets to the NHS to reduce the cost of administration by as much as 20 per cent.

A source close to the DH told HSJ its consideration of those targets had involved visits to back office outsourcing centres in India.