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Hospitals aim to save £2.35bn

21st June 2012

New figures have revealed that hospital trusts are planning to take £2.35bn out of their cost base during the current financial year.

Pound Coins

An investigation by HSJ looked at figures from 133 acute non-specialist trusts, which revealed that the average cost improvement programme (CIP) target across the sector is 5.3% of turnover in 2012/13.

Almost half were trying to make savings from reducing their pay budgets - amounting to £1bn - with others looking to grow their income.

The 5.3% CIP average is above the Department of Health’s 4% efficiency target and it has also emerged that 19 of the 133 trusts have set CIP targets of 7% or more.

Foundation trusts have submitted their annual three-year plans to Monitor and the regulator’s analysis of these is due in August.

James Wilson, managing director of NHS finance consultants Assista, said: “In terms of pay CIPs, all the low-hanging fruit has gone now. Any significant pay CIP would require serious organisation.”

Other trusts told HSJ they had already reduced costs in areas such as agency spend while one noted that with a focus on quality and patient satisfaction there was "less scope to reduce headcount".

King’s Fund chief economist John Appleby said the results of HSJ’s survey were similar to those in the think tank’s May monitoring report, in which 60 finance directors predicted an average CIP saving of 5.2%, ranging from 2.5-8%.

Many hospitals see increasing challenges in continuing to deliver CIPs at the level required and many had already missed their savings targets for 2011/12.

 

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