Government spending restrictions are delaying key reform programmes and will mean an underspend of £40m across the Department of Health’s 15 arm’s length bodies.

The National Institute for Health and Clinical Excellence has slowed the output of its quality standards programme, the central plank of the proposed commissioning outcomes framework which will be used to measure commissioners’ performance. Meanwhile, the NHS Information Centre has had to revise delivery timetables for a number of projects, including plans to make key hospital activity data more secure.

Under the government restrictions, organisations must receive DH approval for spending on recruitment of non-frontline staff, marketing or consultancy. A block on recruiting inspectors has already reduced the number of inspections carried out by the Care Quality Commission.

The 13 per cent underspend across arm’s length bodies at the end of December is forecast to have reduced to about 9 per cent across the board by the end of the financial year. However, this still means nearly £40m could be returned to the DH unspent.

Royal College of GPs chair Clare Gerada said it was important that efficiency savings were made but it should not interfere with “core work” such as the quality standards.

The Health Bill envisages NICE quality standards as being a vital component in driving up quality by forming the basis of the indicators in the commissioning outcomes framework.

National Association for Primary Care executive member Johnny Marshall said clinical commissioning groups were eager for clarity around the outcomes they would be measured against and would not welcome any delay in the quality standard programme.

NICE said programme delays had contributed more than £2m to the £9m underspend it is forecasting for the end of the year. A further £3.1m is a result of recruitment restrictions.

NICE finance director Ben Bennett said about 40 per cent of the underspend was down to government restrictions. The rest was part of a programme of “managing down” resource in preparation for a 25 per cent budget reduction by 2013-14.

Two thirds of the organisations said government-wide recruitment restrictions were responsible for at least part of their underspend. The Council for Healthcare Regulatory Excellence, which is underspent by 13 per cent, has six business cases with the DH awaiting approval.

A member of the executive team at one of the bodies said the restrictions had made a difficult couple of years even more “tricky”.

The CQC meanwhile has agreed to spend £5m of  its underspend on improved inspections.

A DH spokeswoman said the department had not prevented arm’s length bodies from securing necessary staff or resources.

Arm’s length body underspends

 Planned spend 2011-12 (£m)Q3 Underspend (%)Year end forecast underspend (%)
Appointments Commission3.72139
Council for Healthcare Regulatory Excellence2.361311
Care Quality Commission142.71510
General Social Care Council19.611414
Health Protection Agency34030
Human Fertilisation and Embryology Authority6.65552
Human Tissue Authority6.391914
National Institute for Health and Clinical Excellence68.91613
National Patient Safety Agency24.1130
NHS Blood and Transplant434.421
NHS Business Services Authority119.332
NHS Information Centre36.7674
NHS Institute57.3790
NHS Litigation Authority1,34380