Government set to issue a five year spending plan for NHS

There has been speculation since the Budget in April that November’s report could form a fresh comprehensive spending review to cover 2010-11 – the last year of the current spending period – to 2012-13.

But with the government gearing up to clarify what efficiency savings and cuts will be needed to tackle the UK’s £175billion deficit, a source close to prime minister Gordon Brown said it was considering using the November report to set up departmental spending plans for “possibly the whole of the next parliament”.

That would pencil-in spending up to 2014-15 and could potentially allow the government to map out a more comprehensive strategy for nurturing signs of economic recovery in the short term, while also showing it is not afraid to make “tough decisions” in the longer term.

Speaking to the TUC conference in Liverpool on Tuesday Mr Brown said: “Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets. But when our plans are published in the coming months people will see that Labour will not support cuts in the vital front line services on which people depend.”

Tomorrow, health secretary Andy Burnham is due to give what is being billed as a “major“ speech to the King’s Fund in London today. Still being written as HSJ went to press, the government views it as part of a continuum of speeches given over the last 10 days by Chancellor Alistair Darling, business secretary Peter Mandelson and Mr Brown. All have seen the government take a more candid tone on the spending cuts to come.

Although Mr Burnham’s King’s Fund speech will emphasise the importance of efficiency savings and hint at “priorities”, it will not go into detail on cuts or targets.

HSJ understands the government believes NHS chief executive David Nicholson has been right to say up to £20bn of savings are needed from the NHS over the next three years. But it is yet to decide what proportion of that £20bn will need to be “cashable” – tantamount to resource cuts – and what will be reinvested to improve and expand services. That decision is due to be made in November’s report.

Instead Mr Burnham’s speech will set out his commitment to the government’s reforms – including foundation trusts, devolution and patient choice.

He will add to that an emphasis on prevention and early intervention as a potential source of future efficiency savings. He is also expected to set out the government’s vision of an evolution of a number of existing NHS targets into patient rights and entitlements.

The government plans to detail that vision in a strategy document – or possibly white paper – later this year.