Next week’s pre-Budget report will be published alongside a paper from the chief secretary to the Treasury Liam Byrne outlining how billions of pounds will be saved through public sector efficiencies.
The paper - which Treasury officials say could be a white paper and whose drafting has involved the Treasury, Cabinet Office and the prime minister - is likely to include details on how the £9bn annual efficiency savings set out in April’s operational efficiency programme report will be made.
Treasury officials are considering outlining a selection of public sector asset sales - such as NHS arm’s length bodies
That report singled out health service back offices as a source for substantial savings, claiming organisations that used the NHS Shared Business Services model had saved 20-30 per cent of their administrative costs.
Treasury officials are also considering outlining a selection of public sector asset sales - such as NHS arm’s length bodies.
This could include organisations such as NHS Professionals, which the Department of Health is intending to turn into a limited company with shares owned by the secretary of state.
PricewaterhouseCoopers partner and healthcare lead Ian Wootton said: “They will look at appropriate assets sales to both raise cash and drive efficiency.”
But he doubted any of the sales likely to make it into the efficiency report would raise the volume of cash required to cut the spending deficit, which could reach £200bn this year.
The National Institute of Economic and Social Research has said options must include politically difficult moves such as extending VAT, raising income tax, freezing public sector pay and cutting jobs.
But such decisions will likely only be made after next year’s election. Conservative leader David Cameron has already said that if his party wins, it will have an “emergency budget”.
In the meantime, health service managers have the added uncertainty of a delay to the publication of the tariff for 2010-11. The DH expects to publish the final tariff in mid February, although a draft tariff will be published alongside the operating framework before then.
As HSJ has revealed, the DH plans to effectively freeze tariff prices from April by making any increase contingent on trusts meeting their commissioning for quality and innovation (CQUIN) framework targets.
Speaking at a conference held by HSJ’s sister title Nursing Times last month, DH programme director for quality in nursing Gerry Bolger said up to 1.5 per cent of tariff prices would be contingent on CQUIN - three times the value this year. The DH has previously indicated it would eventually like CQUIN payments to extend to 3 per cent of a tariff price.
HSJ’s conference Achieving Savings and Efficiencies in the NHS is on 10 February 2010. www.hsj-efficiencies.com