14 Dec 2010

NHS will be tested ‘to the limit’ amid spending cuts

MPs warn that the Government’s efficiency savings over the next four years pose a “significant challenge” to the NHS and social services which will be “tested to the limit”.

NHS will be tested 'to the limit' amid spending cuts

Ministers sitting on the influential Health Select Committee have warned that significant cuts proposed by the government in the spending review threaten services in the NHS and social care.

Unprecedented levels of efficiencies would be needed to avoid cuts in services, MPs concluded in a report published today.

NHS savings needed over the next four years – estimated to be 4 per cent annually – have never been achieved in the health service before, committee chairman Conservative MP Stephen Dorrell said.

Social service departments would need to deliver efficiency gains of 2 per cent to 3.5 per cent each year to avoid service reductions, he said.

“The Government’s plans for health and social care are based on assumptions which will test these services to the limit,” he said.

“There is no precedent for efficiency gain on this scale in the history of the NHS, nor has any precedent yet been found of any healthcare system anywhere in the world doing anything similar.”

Cuts

The report published by the cross-party committee warned that the Government was not providing “a clear enough narrative” about how savings were to be made without hitting services.

The Government’s plans for health and social care are based on assumptions which will test these services to the limit. MP Stephen Dorrell

It called on ministers to provide an estimate of how much money would be soaked up by reorganisation in the NHS which was creating additional uncertainty about budgets.

In social care, there would be “an inevitable impact” on provision from the local government settlement, the committee said.

Ministers’ assurances that councils would have enough money to maintain services given a two-year pay freeze were not supported by the evidence, it said.

“The evidence submitted to us, including the evidence submitted by the Government itself, does not allow us to agree,” it said.

“Councils will need to sustain further efficiency savings of up to 3.5 per cent per annum to avoid reducing their levels of care, and this will not be easy.”

It said better interaction between health and social care was “critical” to achieving cost savings but the “institutional policy structures” were not geared up for that.

“It is not enough for the Government to exhort change in this area: there must be a formal policy infrastructure that recognises the importance of achieving a better overall interface between the two sectors,” the committee said.