Review of Budget 2010: Health and Social Care

Introduction
In his 2010 Budget Statement Alistair Darling, the Chancellor of the Exchequer, made several announcements of relevance to health, science and social care. This briefing note summarises the key points – additional updates will follow as more information is released.

Public Sector Spending
The Government believes that public services have a vital role to play in supporting Britain’s long term growth and competitiveness. In his speech the Chancellor confirmed that public spending will continue to increase in 2010-11 by 2.2%, but from 2011-12 to 2014-15 it will fall to an average of 0.8% “when the economy should be able to support a more rapid tightening.” NHS frontline spending has been identified as a priority and will rise in line with inflation. No similar commitments have been made for social care and very little additional information was given about future government spending.

The NHS: Meeting the Quality & Productivity Challenge
However, the Budget also confirmed that the health service will deliver total annual efficiency savings of £15 to £20 billion by 2013-14. This figure, first mentioned last year by the NHS Chief Executive David Nicholson, has become known as the “quality and productivity challenge” and consists of several different elements ranging from improvements in the way care is delivered to procurement savings and reducing back office costs. Further details are given in Budget 2010: Securing the Recovery , which was also published today:

  • £3.5 billion will be saved by increasing staff productivity by systematically spreading best practice, improving staff health and well-being and reducing the use of agency staff.
  • £2.7 billion will be saved by improving the way long term conditions are managed, which will include improving case management, encouraging self care and reducing emergency admissions.
  • £2 billion will be saved through “better procurement”, reducing back office costs and better use of the hospital estate.
  • £1.5 billion will be saved through more effective commissioning and improving mental health services “to ensure the most effective interventions in the most effective settings.”
  • As “an interim step”, £10 billion of value for money and quality improvements will be delivered by 2012-13.

Andy Burnham, the Health Secretary, also gave further details of how the Department of Health and the NHS will contribute towards the savings being made across government under the auspices of the Operational Efficiency Programme and the Smarter Government initiative. The DH and NHS will contribute £4.35bn towards the total target of £11bn of savings. Activities will include:

  • Up to £1.5bn will be saved by driving down the costs of procurement through securing best prices for goods and services;
  • £100m will be saved by taking a new approach to the National Programme for IT that offers greater choice to local hospitals. This is part of the £600m reduction in lifetime costs announced in December 2009;
  • £60m will be saved by reducing the amount of energy the NHS uses, to deliver a 10 per cent cut in carbon emissions;
  • Up to £70m will be saved from more efficient use of NHS estates; and Up to £555m by reducing staff sickness absence in the NHS.

Further details can be found in Putting the Frontline First: Smarter Government which includes proposals for improving efficiency between central government and the front line, making better use of comparative data to drive performance, and more effective and collaborative procurement which will also increase the opportunities for SMEs.

The Government has also published Reforming Arm’s Length Bodies , which sets out plans for reforming and rationalising the number of organisations and introducing a “much stricter” governance framework designed to create more rigorous procedures for setting up, dissolving and scrutinising ALBs. The Government plans to abolish over one hundred bodies and deliver savings of £500 million by 2012-13. Further details will be published over the coming months.

Supporting Science & Innovation

The Chancellor repeated the Government’s commitment to making the UK an attractive place to invest in and exploit innovation. The key initiatives include:

  • Introducing a new model for Technology & Innovation Centres to research, prove and develop technologies where the UK has a world-leading expertise and have the greatest potential for growth. Further details will be published later this year.
  • A consultation will be held on introducing a new “gateway for the export of NHS intellectual property and services”. It will be designed to enable NHS bodies to take advantage of “cutting edge medical and managerial innovations” in order to “raise new funds to invest in frontline patient care.”
  • An Institute of Web Science will be established by the Universities of Oxford and Southampton to ensure the UK remains at the forefront of internet developments. It will be supported by £30 million of government funding.

Further details can be found in Budget 2010: Securing the Recovery.

Our other 2010 Budget reviews