NHS trusts face “difficult choices about the services they provide” as they fight to sustain savings programmes of 5 per cent a year, according to a report by Monitor and the Audit Commission.

Delivering Sustainable Cost Improvement Programmes, published today, also warns that few providers have formal processes in place to evaluate the success of their savings drives.

Even the most successful trusts will find it “challenging in the future” to make the savings they need and all should review their approach to managing cost improvement plans, it cautions.

It states: “To succeed in making sustained annual savings of 5 per cent, boards may need to radically transform their trusts and face difficult choices about the services they provide.”

The report pulls together examples from NHS and foundation trusts to give providers a guide to “best practice” in running cost improvement plans.

It warns “few [trusts] have formal evaluation frameworks in place”.

The report advises trusts to ask whether they delivered savings for the prior year, both in terms of planned savings and whether schemes worked as intended. “Many trusts make non-recurrent savings to balance the books but fail to deliver what they planned,” it notes.