Operating framework: management costs to be slashed by £220m this year

The revised 2010-11 operating framework sets out how the NHS is required to “make immediate efficiency savings by tackling escalating management costs”.

Additionally, as reported by HSJ last week, three of the previous government’s main operational targets have been abolished and relaxed. Primary care access targets and the 18 weeks referral to treatment target have gone, while the four hour A&E target threshold has been reduced from 98 per cent to 95 per cent.

The revised operating framework requires the NHS to remove all additional management costs incurred during 2009-10 - worth around £220m - over the remainder of the current financial year, in order to return levels to those of 2008-09.

Looking ahead to the 2011-12, the operating framework calls for a further reduction in management costs worth £350m. By 2013-14 the NHS should have slashed its management costs by 46 per cent – equivalent to £850m – on 2009-10 levels, according to the revised operating framework.

Health secretary Andrew Lansley said: “Management costs in primary care trusts and strategic health authorities have increased by over £1bn since 2002-03, with over £220m of the increase taking place during 2009-10. Management costs now stand at £1.85bn.”

In an interview with HSJ, to be published on Thursday, Mr Lansley said he would insist that management costs were reduced this year. He said: “I was astonished there wasn’t already a process of recognising that management costs were escalating and a way of bearing down on that.

“It is outrageous [given economic situation] and I wasn’t willing to tolerate it,” he told HSJ.

Speaking on targets, Mr Lansley said he wanted to “free the NHS from bureaucracy and targets that have no clinical justification”.

He told HSJ: “We will continue to measure referral to treatment times and we would expect there to be continuous improvement in the median waiting times as a measure of securing the performance of the service.

“That does not interfere with clinical judgement and priority in the way that 18 weeks has done. Providers have tended to treat 18 weeks as a default position. When you’re exercising choice, very often that’s the offer you get.

“Through NHS Choices and other choice mechanisms, providers should be offering waiting time info as part of the basis on which patients exercise choice.Then choice does drive competition and patient choice,” said Mr Lansley.

The operating framework also tells the NHS to give greater priority to military veterans’ health and dementia. 

It says the NHS must ensure that injured military personnel experience a smooth transition from military to NHS care as well as receiving priority treatment for conditions related to their service. 

Additionally, the NHS must work closely with partners to implement the National Dementia Strategy and publish information on how they are doing this. 

Read the full interview with Mr Lansley in the next issue of HSJ or at HSJ.co.uk, from Thursday.