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Successful savings programmes are not just about cutting costs - NHS trusts must ensure they transform services too

24th January 2012

The Audit Commission and Monitor, the independent regulator of NHS Foundation Trusts, are challenging trusts to review their approaches to delivering cost-saving plans. As well as saving money they must also transform clinical and non-clinical services in ways that improve patient care, satisfaction and safety in the long term.

To help with this the two organisations have published today the Delivering sustainable cost improvement programmes guide. It is aimed at all NHS trusts and foundation trusts, and shows how successful organisations approach the delivery of cost improvement programmes (CIPs).

The NHS needs to save up to £20 billion by 2015 - an average of 5 per cent each year and the biggest efficiency challenge the NHS has faced. While NHS funds are not being reduced, money needs to be found to meet cost pressures such as increasing demand for services and new technologies. Trusts were more ambitious with their saving plans last year and overall delivered more savings, but the rate of cost-cutting achieved as a percentage of the plan fell compared to 2009/10.

Andy McKeon, MD for Health at the Audit Commission, says: ‘Health organisations are used to making efficiency savings, but the increase in NHS funds over the last decade reduced the pressure. Now trusts are facing a real-terms freeze on resources, alongside continuing demands for better services, new technologies and improved quality.

‘CIPs are not just about money, but about achieving sustainable high quality service delivery. Our research shows that success varies greatly from trust to trust, and no single approach works for all. We have found common factors in the higher performing trusts which have enabled them so far to deliver savings without reducing quality or patient safety. This isn’t easy and there are difficult choices ahead, but it is critical everybody adopts the proven techniques described here. Our guide is also designed to help trusts test how well they measure up.’

The Commission and Monitor warn against taking short-term reactive decisions, particularly if they may compromise services and safety. Cost cutting by freezing recruitment and cutting agency staff has already been done by most. Now a more strategic approach is needed. This is not just a finance issue, but a matter for the whole organisation. Strong clinical leadership and engagement is vital, as are the people delivering CIPs on the ground.

Chair of Monitor, David Bennett, says: ‘The aim for the NHS is to save money by reducing inefficiency and to invest the savings in improving services for patients. This won’t happen without strong leadership. It’s the board’s responsibility to ensure the organisation is committed to achieving efficiency improvements by changing the way services are delivered and improving processes, rather than by implementing cost cutting measures that have a negative impact on the quality of care patients receive. To really succeed though, boards must put clinical staff at the heart of the process.

‘Delivering cost savings is likely to remain one of the key challenges facing foundation trusts – and the rest of the NHS – for the foreseeable future. The financial challenges facing the economy as a whole means that all trusts need to make sure that they are making every pound go as far as possible so that patients receive the quality care they deserve.’

Aimed at executive and non-executive directors, finance staff and those with responsibility for delivering cost improvement programmes, the guide was compiled with the help of sixteen NHS organisations.

 

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