The Treasury wants the NHS to find another £1bn a year in efficiency savings. More money for the front line or just scraping the barrel, wonders Lyn Whitfield

'It's dynamite. It's a scheme for controlling local authority expenditure... Every council official responsible for a new project would have to list the criteria for failure before he's given the go-ahead...'

I could not see why (Humphrey) was getting so worked up about it. And then the penny dropped: these failure standards could be made to apply to Whitehall as well...

The Complete Yes Minister

Jonathan Lynn and Antony Jay

Two decades after Britain's most famous (if fictional) bureaucrat rejected the idea of bringing 'the whole squalid world of professional management' into government, the Treasury is making another attempt.

Chief secretary Stephen Byers promised nothing less than a 'revolution' in its way of doing business when he launched the Public Services for the Future white paper last month.

'For the first time, the government is setting out its strategic objectives for the long term in each area of government and targets for the progress it aims to make during the rest of this parliament and beyond,' he said.

'For too long people have focused on how much money is spent on public services. It is now time to move on and consider the more important issue - how the money is spent and what people get in return.'

Some commentators remain unimpressed. Shadow chief secretary David Heathcoat- Amory describes the white paper, with its 175 efficiency targets and 350 performance targets, as 'well meaning' but 'little different to the review of performance used in any normal spending round'.

The white paper sets out the public service agreements for 1999-2002 agreed between the Treasury and all government departments as part of the comprehensive spending review.

Overall improvements in efficiency are scheduled to release£8bn a year by 2001-02. These will be 'redirected into front line services'.

The NHS is expected to contribute by finding 'efficiency and other value- for-money gains equivalent to 3 per cent of health authority unified allocations for the next three years' - or£1bn a year in headline terms.

Suzanne Tyler, deputy director of the Institute of Health Services Management, says this will place 'unprecedented pressure on a health service that is having to maximise existing resources to implement the government's avalanche of initiatives'.

NHS Confederation chief executive Stephen Thornton is only slightly more optimistic.

'The NHS has been subject to efficiency targets for 20 years. We have therefore taken out of the system all the most obvious inefficiencies and in effect are left scraping the barrel,' he says.

Each department is also given targets for 'increasing the productivity of operations' by increasing the proportion of business conducted electronically, cutting sickness absence and reducing fraud.

Strategies for doing all three have already been announced in the NHS. But the white paper gives details of a further area for action - procurement. It says the Cabinet Office's efficiency and effectiveness group has sent its review of procurement to ministers, and the NHS Executive will soon be expected to start work on 'a detailed action plan'.

It is difficult to square the new white paper's demand for leaner and leaner management of public services with more and more performance-managed ones.

Public Services for the Future sets out aims and objectives for 22 departments and three areas where a 'joined-up approach' is needed - the criminal justice system, illegal drugs and help for families with young children. The objectives are all referred back to the government's overall aims, given as increasing sustainable growth and employment, promoting fairness and opportunity and delivering efficient and modern public services. So, the Department of Health has four objectives, one of which is to 'reduce avoidable illness, disease and injury in the population'.

Departments are given performance targets relating to these objectives. The DoH has 14, none of which is new and some of which are extremely well- worn, since they include Labour's manifesto pledge to 'reduce NHS inpatient waiting lists by 100,000 over the lifetime of the parliament'.

The DoH's seventh objective is to 'improve the quality and effectiveness of care in the NHS' by establishing the National Institute for Clinical Excellence by 1 April. NICE is expected to produce 'at least 30' appraisals of treatments and technologies a year by 2000-01 with related guidance. And the impact of the guidance 'will be assessed by the use of performance indicators'.

The white paper says annual reports on the PSAs will be produced, and yet further documents are promised 'to help complete the picture'.

Output and performance analyses will 'include the measures which will be used to chart progress against the specific targets set out in the PSAs'. As NHS joint deputy director of finance Richard Douglas told a recent conference, if managers think there is a lot of monitoring now, they 'ain't seen nothing yet'.

Public Services for the Future. Stationery Office.£28.