Waste in the NHS soared in the last decade as spending grew by two thirds but productivity fell each year, according to a report by the government’s spending watchdog that critics say raises fresh concerns about the coalition’s plans to shake up the health service.
The report by the National Audit Office, released today, says the government’s plan to make £20bn in efficiency gains is now at risk because radical plans to scrap health trusts will mean managers are too “distracted” to deliver the savings.
From the year 2000, pay for consultants, GPs and nurses increased by up to 60% – consultants now get an average salary of £120,000 a year –and the rising number of NHS staff outstripped the increase in the number of appointments and operations over the 10 years, the NAO found.
With pay swallowing an ever larger amount of taxpayer’s spending, productivity in NHS hospitals dropped by 1.4% every year, despite the budget swelling from £60bn in 2000 to £102bn in 2010. The report says: “There is a risk that strategic health authorities and primary care trusts, which are responsible for driving the delivery of the efficiency savings, will be distracted by their planned closure by March 2013.”
Karen Taylor, director of health at the NAO, said: “[Making the savings] is a huge challenge. We are looking at 4% to 6% a year productivity improvements. An unprecedented amount of savings is required. We have seen a lot of money given over to the NHS, but not a focus on value for money. This is because doctors did not improve productivity despite promises to do so and the NHS ended up paying for operations not outcomes.”
Nigel Edwards of the NHS Confederation said: “Of course people will be distracted from making savings. They are about to lose their jobs. We have warned that the white paper proposals do risk making the savings more difficult.”
He said that in the last decade the NHS had offered patients a better experience, with waiting times down from 12.9 weeks in 2000 to 4.3 in 2010. “It is very difficult to measure productivity, so we cannot just take the numbers at face value.”
But Simon Burns, the health minister, said the report “shows why we cannot simply keep pouring money into an unreformed system”. He added: “It sends a stark message about declining productivity in the NHS in recent years, particularly in hospitals. It also highlights ineffective commissioning by primary care trusts.”
The prime minister’s official spokesman claimed the health service would continue to receive real-term increases in funding. But he added: “We are not going to be able to provide 5%-10% real increases in every year as has happened in previous years, because the financial environment doesn’t allow that. That’s going to require the NHS to become more efficient.”
Hamish Meldrum, chair of the British Medical Association, said: “Doctors are working incredibly hard for the NHS. Consultants are working beyond their contracted hours, and increasingly taking on a greater frontline role in response to the needs of their patients and the growing demands on the NHS. We need to ensure that, in the light of the current financial pressures, these hard-won improvements are not undone.”
Labour said the report vindicated its assertion that the government’s plans would undermine the ability to make savings in the NHS. John Healey, the shadow health secretary, said: “With such a complex system as healthcare it’s hard to have a sound measure of productivity. What matters most is the patients and we have the highest level of satisfaction with the NHS ever.”
Polly Curtis and Randeep Ramesh
Guardian UK