NHS England aims to make significant cash cuts to its £1.7bn central budgets in coming years, as it scales back its centrally run programmes to free up funds for frontline work on service transformation.

The NHS England allocations paper, published yesterday, revealed that the budget is to be cut down to £1.2bn in cash terms by 2020-21, with annual cash cuts ranging from 4.2 per cent to 10 per cent.

The budget is comprised of NHS England’s own management costs, funding for central programmes for research and the development of guidance, and some money that is effectively passed through NHS England to the wider system, such as clinical excellence awards.

HSJ understands that the area targeted for the biggest real reductions in the early years is the central programmes budget, which is set for a cash cut of around £70m, or 10 per cent, in 2016-17, and a further £50m the following year.

To make this reduction, the organisation is expected to embark on a radical prioritisation of its current programmes, to focus the money available on those programmes essential to the priorities outlined in the Five Year Forward View.

The organisation will also have to make significant reductions to its own administration budget over the course of the five year period, but the main burden of these reductions is expected to fall in the later years.

'Substantial risk' to specialised care budget, NHS England warns