Public Expenditure - Health Committee Contents

5 Healthcare

The Spending Review settlement for healthcare

45. The Department of Health was one of only two departments (the other being the Department for International Development) for which the Government had pledged to protect funding. In the Spending Review the Department was allocated an increase in its Resource budget, with cumulative growth reaching 1.3% in real terms by 2014-15 on the assumptions used in the Spending Review. The Administration budget (i.e. the Department's 'back office' costs) within the Resource budget falls in real terms by 33% by 2014-15. This is in line with the average decrease across departments of 34%. At the same time, the Department of Health Capital budget will fall by 17% in real terms by 2014-15 (compared with an average decrease across departments of 29%) on the assumptions used in the Spending Review.

46. As we have seen, the Spending Review also committed the NHS to set aside funding within the Resource budget, growing to £1 billion by 2014-15, to fund social care (including a specific allocation for reablement services).

47. The Department of Health takes up a significant portion of the Government's total funding across departments: by 2014-15 the Department of Health will account for 33% of the total Resource budget and 11% of the total capital budget. The ability of the NHS to operate within its settlement is therefore vital to the achievement of the Government's spending plans.

  1. There has been some political debate regarding the Government's description of the Spending Review settlement as a real-terms increase. The fact of the matter is that the question of whether or not the settlement fulfilled this description depends on which particular parts of the settlement are included in the calculation. The 1.3% real terms increase in the Resource budget (on the assumptions used in the Spending Review) is consistent with the Coalition Government's commitment on health spending. However, this cumulative real terms growth for the NHS is significantly reduced if the additional £1 billion NHS funding for social care (which will be formally transferred to local authorities on the basis of an agreement with the NHS, rather than spent directly by the NHS itself) is separated out, as demonstrated by the following table:

49. The discussion of whether or not the settlement could be considered a 'real terms' increase is also affected by whether one considers the Resource budget in isolation (as above) or the total budget (resource plus capital). The total budget (resource plus capital) increased only marginally in real terms if the additional social care funding is included, and actually was expected to fall by 0.54% in real terms by the end of the Spending Review period if this funding is excluded. The Government has confirmed that the additional social care funding is essentially a transfer from the NHS capital budget.[53]

50. This debate has now been overtaken by events. Since the Spending Review, the Office for Budget Responsibility (OBR) has revised its earlier forecasts for the GDP deflator.[54] This is the general measure of inflation used by the Treasury to calculate inflation-adjusted or real figures, and in particular, is the measure used in the Spending Review to calculate NHS funding in real terms. For three of the four years of the spending review the OBR has now revised its GDP deflator forecasts upwards. The cumulative GDP deflator from 2011-12 to 2014-15 is now forecast to be around 0.65% higher (10.49% instead of 9.84%) than the estimate used in the Spending Review. As the cash rise in the total NHS settlement announced by the spending review was 10.21% by 2014-15, the real terms increase of 0.34% over four years is now forecast to be a real cut of around 0.25% - equivalent to an average annual real cut of 0.062%. Compared with this year, this translates into a real cut of around £0.25 billion by 2014-15.

51. The marginal nature of the real terms increase in spending on health meant that the Government's commitment would be vulnerable to small shifts in inflation. When questioned on this issue in the House on 7 December, the Secretary of State said:

"At the Spending Review we set out what met our commitment. I am very clear that...revenue funding for the NHS will increase in real terms...The gross domestic product deflator will move from time to time, but the commitment that we set out was clear and will continue".[55]

As it stands, however, the Government's commitment to a real terms increase in health funding throughout the Spending Review period will not be met. This emphasises the fact that the settlement, although generous when compared to other departments, represents a substantial challenge to the NHS.

The 'Nicholson Challenge'


52. Over the past 39 years the NHS has received combined capital and revenue funding of an average of 3.9% per annum above inflation,[56] which has allowed it to keep pace with long-term pressures from demography, medical advances and rising patient expectations. The NHS is now in a position where it will need to make substantial efficiency gains to allow it to continue to meet the demands made of it. Indeed, several witnesses have noted that various aspects of NHS inflation more or less cancel out any increase in funding received under the Spending Review.[57]

53. This state of affairs has not come as a surprise to the NHS, and it was anticipated by Sir David Nicholson, the Chief Executive, through the establishment of the QIPP (Quality, Innovation, Productivity and Prevention) programme, designed to deliver efficiency savings of £15-20 billion between 2011 and 2014. This 'Nicholson Challenge' was first set out in the NHS Annual Report for 2008-09,[58] well before the change of government and the Spending Review. The challenge reflects independent analysis, such as the 2009 report by the King's Fund and the Institute for Fiscal Studies that also suggested the NHS would need to sustain large annual productivity increases in order to maintain the quality of its services against a background in which it was recognised that health spending was bound to rise more slowly in the immediate future than it had done over the previous decade.[59]

54. The public sector pay freeze for the first two years of the period will contribute to the required efficiency gains. The Committee is mindful that the achievement of the Nicholson Challenge will depend on the efforts of NHS staff whose pay is being frozen.

55. The scale of the challenge is immense. Sir David told us "It is huge. You don't need me to tell you that it has never been done before in the NHS context and we don't think, when you look at health systems across the world, that anyone has quite done it on this scale before".[60]

56. In considering the financial constraints facing the health service it is important to remember that this efficiency challenge predates both the White Paper reorganisation and the specific Spending Review settlement: but these subsequent developments provide a new context within which the challenge must be delivered.


57. Although the NHS has received a significant increase in resources over the last decade or so, this has been put to use in expanding services ('using more to do more') rather than focusing on making efficiency gains ('doing more with the same'). We recognise that the current efficiency challenge is not about cutting £15-20 billion from the NHS budget, nor should it lead to a reduction of £15-20 billion of services. Instead the NHS must derive £15-20 billion more value from its budget, in order to meet rising demand and improve the quality of services without a corresponding increase in funding.

58. The importance of viewing the challenge in this way was stressed by the King's Fund in its July 2010 paper 'Improving NHS Productivity':

As the NHS grapples with significantly smaller increases in funding from 2011, there is a danger that the necessary focus on improving productivity becomes, at best, an end in itself and, at worst, a misunderstanding that the NHS needs to dramatically cut budgets, reduce services for patients, and sack staff. The NHS will need to carefully select the strategies which, together, produce more value from the same or similar resource - not the same for less.[61]

59. On a general level, witnesses have told us that efforts to meet the spending challenge in a coherent way are being complicated by the lack of a clear 'narrative' from central government. Dr Hamish Meldrum of the BMA told us:

I think we really need to see a much better narrative than we have up till now: not only what is the rationale for actually making it that amount but actually where are these moneys going to be reinvested, what jobs are going to be needed in order to do that and, therefore, both locally and nationally, having much greater detail about the whole flow of funds and resources over the next four years.[62]

This was supported by Dr Peter Carter of the RCN, who told the Committee:

the current worry is that the service redesign at the moment is done on the back of needing to save money rather than the back of a good, properly thought through strategic plan which is taking a local health service forward.[63]

60. The efficiency challenge for the NHS is not about cuts. It is about doing more with the same amount of money. The Government needs to ensure this fact is more clearly communicated both by the NHS itself and to the wider community.

61. The scale of the challenge is enormous. The NHS does not have a good recent record on improving productivity. While it is widely accepted that measuring productivity is problematic and that an entirely satisfactory method has yet to be devised, ONS figures show that between 1997 and 2007, measured NHS productivity was flat or declining over the whole period,[64] whereas private sector productivity improvement averaged 2% per year. The Secretary of State told us that this low productivity, coupled with the 'relatively high platform of resources' that the NHS had been given over previous years, actually indicated that there was plenty of scope for productivity improvements.[65] This is true, provided that the correct mechanism can be found to turn this potential into results.

62. There is an urgent need for a credible plan to deliver the efficiency gain which is the central requirement of the Spending Review settlement for the NHS. Many witnesses have drawn attention to the need for this plan and have expressed concern that it is not yet available. We share this concern.

63. In his 2002 review of future funding of the NHS, Sir Derek Wanless set out three funding scenarios depending on progress made in relation to future demand, supply and costs of healthcare. A study by the King's Fund in 2007 concluded that the NHS was progressing in line with the middle scenario ('solid progress') but that in the period up to 2013-14, there was likely to be a shortfall in funding of just under £21 billion. £9 billion of the shortfall was made up from factors such as real pay and prices, and capital investment, while £12 billion of the gap in funding related to the need to effect actual improvements in the quality of care, resulting from changes in the way care was delivered. [66]

64. This message of quality is one that we are also hearing from the Department of Health. The Secretary of State told us that the QIPP programme was "deliberately designed around the proposition that we are going to increase quality and deliver greater efficiency by the use of innovation and prevention to deliver an overall rise in quality and productivity. Productivity only captures a sense of doing the same thing with fewer inputs. We're looking not only to carry on doing the same thing, but to increase the quality of what we do by changing the design of what we do".[67] Sir David Nicholson assured us that it was 'perfectly possible to improve quality and increase productivity simultaneously'.[68] The White Paper stated that the QIPP programme would 'continue with even greater urgency, but with a stronger focus on general practice leadership. The QIPP initiative is identifying how efficiencies can be driven and services redesigned to achieve the twin aims of improved quality and efficiency'.[69] Edward Macalister-Smith, Chief Executive of Buckinghamshire Primary Care Trust, told us that 'it is possible to close that gap, and it is possible to do it while maintaining quality and improving patient experience. But it needs to be very, very determined and it is going to involve really quite radical changes to the behaviour and the operations of all parts of the system'.[70]

65. The demand pressures will mount steadily over time. It is for this reason that it is vital for the Government to ensure that the savings programme also gets results on a consistent basis across the Spending Review period, rather than focusing solely on the end point of making £20 billion worth of savings by 2014. The Department assured us that they were planning on this basis.[71]

66. Efficiency gains of this kind are difficult to measure. Sir David Nicholson told us that savings deriving from the tariff changes would be subject to a matrix and milestones to be published in December, with monitoring against these standards published in The Quarter for each quarter of the savings programme. We were told that each individual NHS organisation would also have, by March, an efficiency plan based on the expectations set centrally.

67. The QIPP programme is the tool available to healthcare to make efficiencies, and represents a good starting point. However, the scale of the challenge is so immense that QIPP will need to demonstrate clear savings early in order to provide the savings programme with the momentum to proceed at a steady pace towards the £15-20 billion goal. Close monitoring and consistent reporting of performance against publicly available norms will be essential if these gains are to be seen as real improvements rather than accounting changes.

68. Sir David Nicholson gave us the following assessment of how the savings would be made:

If you look at those savings, about 40% of them will come from essentially a mixture of things which are much more under our central control. So, for example, the pay savings, the management costs savings, the administrative cost savings, the savings on central budgets of the Department—all of those things—come to about 40% of the total savings. That is reported out and we can look at that. The second group of savings—about 20%—come from service change. So that is the thing I talked about; the movement from secondary to primary care and that sort of thing. The third lot is about 40%, which is the savings you get through the tariff in the acute sector, so driving efficiency in hospitals.[72]

69. The Secretary of State stressed the particular importance being placed on the reduction in management and administration costs: 'by 2014-15, the one third real-terms reduction in administration costs across the NHS will yield a reduction in total administration costs of £1.9 billion. That is effectively one tenth of the maximum efficiency savings we are looking for'.[73] Nigel Edwards of the NHS Confederation cautioned that only a small proportion of savings could actually be made from administrative, management and 'back office' savings: "most of the money is spent on clinical care. If you want to reduce your spending, make your spending more efficient, that is, I am afraid, where you have to concentrate".[74]

70. The Secretary of State is also placing significant weight on the tariff.[75] The tariff is already being used to generate 3.5% efficiency gains in the NHS in 2010-11.[76] If the tariff is to drive 40% of the £15-20 billion efficiency gains required by the Nicholson Challenge then this equates to £2 billion of savings in the acute hospital sector per year. This is roughly equivalent to 5.5% of the PCT allocation spent on general and acute secondary care, and potentially even more for some services, since not all acute sector services are covered by the tariff.[77] Edward Macalister-Smith told us that in his area he expected the majority of savings to be made from provider efficiency resulting from a squeeze of the tariff: "it has got to make that productivity gain in the acute hospital and that is going to be tough".[78] The NHS Confederation also raised concerns about the pressures on acute trusts.[79] The Secretary of State insisted that achieving 40% of savings through the tariff would not be simply about squeezing costs rather than improving quality and efficiency: "the tariff is driving best practice and efficiency. We are going to develop the tariff to do these things and it will be a powerful instrument to make it happen".[80] But reducing the tariff does not, in itself, produce efficiency gains, although it does put hospitals under more pressure to reduce costs. It may be that hospitals meet the squeeze on tariffs by ceasing to provide services, or by subsidising unprofitable lines with profitable ones, without actually improving efficiency.

71. We are concerned that 40% of the necessary efficiency improvements are to be derived from tightening the tariff. There is no guarantee that reductions in the tariff will always result in genuine efficiency gains, and there is a risk that the quality of services could suffer if changes are driven by reductions in the cost of the tariff alone. There should not just be across the board cuts in the tariff. It needs to be revised to remove perverse incentives and encourage best practice.


72. The efficiency challenge is inescapably tied up with the restructuring of the NHS, as set out in the Government's White Paper, Equity and Excellence: Liberating the NHS (July 2010). Described in the foreword as a 'bold vision', the major reforms set out in the paper include the devolution of commissioning from PCTs to GP consortia, the establishment of an independent NHS Commissioning Board, the conversion of all NHS Trusts to foundation trust status, a significant reduction in the number of NHS bodies, and a radical streamlining of the Department's own NHS functions. We are conducting a separate inquiry into the most significant of these changes, the transition to commissioning by GP consortia, and this Report is not an analysis of the White Paper proposals. The transition to the new structure coincides more or less exactly with the Spending Review period and will frame the spending plans for the NHS.

73. Presenting the White Paper to the House, the Secretary of State said 'I recognise that the scale of today's reforms is challenging, but they are designed to build on the best of what the NHS is already doing'.[81] In evidence to us on 20 July 2010 Mr Lansley stressed that, for the majority of clinicians in the NHS the restructuring was 'not an upheaval, it is an empowerment'.[82] He continued this theme when appearing before us for the current inquiry on 23 November: 'what I am proposing is an evolution. I have never called it a revolution'.[83]

74. Witnesses to the inquiry have described the reforms in more drastic terms. Sir David Nicholson, Chief Executive of the National Health Service, told us that 'the scale of the change is enormous—beyond anything that anybody from the public or private sector has witnessed, really'.[84] John Appleby, Chief Economist at the King's Fund, told the Treasury Committee on 1 November 'This is not about tinkering around the edges [...] It is about some radical alterations in the structure and fabric of health care—closing hospitals and centralising some services, which are some of the big things that the NHS has found difficult to do over its history'.[85]

75. The Secretary of State told the Committee that the White Paper reforms feed into the efficiency challenge by ensuring 'that those who are responsible for making clinical decisions do so alongside the resource consequences' and by promoting the better integration of services between community and hospitals.[86] We have also heard from Sir David Nicholson that the dual challenges of efficiency savings and service reorganisation needed to be 'not parallel but mutually reinforcing'.[87] We agree that this is necessary, but we have heard numerous warnings of the risks involved in combining the tight spending envelope and the need for unprecedented efficiency savings with the large-scale reorganisation of NHS structures. The Department of Health's own analytical strategy document for the White Paper acknowledges these risks:

There are clear risks associated with the transition period. For example, SHAs and PCTs will cease to exist, but there will be a reliance on them in the short-term around both managing the transition period and delivering ongoing efficiency savings, such as those associated with the QIPP programme.[88]

76. The Nuffield Trust, in their recent briefing on the White Paper and Spending Review, set out the risks of trying to combine the reorganisation with the need for efficiency savings:

Even if well managed, widespread organisation reform can mean services stand still for a period rather than progress. If managed poorly, services and finances may suffer. There is clear evidence that organisations distracted by reform can experience major financial and service failure. Failure can take several forms; these include a lack of control of expenditure, rushed service changes, or more fundamentally, a decline in the quality of care. This is the more worrying because quality is less readily measurable than finance, and in the current financial climate there will be much attention to the bottom line.[89]

77. Dr Peter Carter of the RCN highlighted that these concerns are also shared by staff on the ground:

This is a heck of a challenge. The £15 billion to £20 billion on its own [...] is absolutely massive, has never been done before, and that on its own would be a major challenge. The White Paper on its own would be a major challenge. Put the two things together and this is as big and as complex as you could get.[90]

78. In particular, the reorganisation is going hand in hand with the White Paper commitment to reduce NHS management costs by more than 45% over the next four years, with the aim of freeing up further resources for front-line care. The White Paper stated that:

[...] as a result of the record debt, the NHS will employ fewer staff at the end of this Parliament; although rebalanced towards clinical staffing and front-line support rather than excessive administration. This is a hard truth which any government would have to recognise.[91]

79. The reduction in management pre-empts the reorganisation, but it raises questions about the delivery of both the reorganisation and the Nicholson Challenge. We know the direct costs of the management reductions (we were told that it would cost up to £900 million in redundancy costs, but that it could 'save £880 million, recurringly'[92]), but there will be wider implications for the control of the restructuring and, in particular, the ability of the system to sustain a focus on the delivery of healthcare during a time of such upheaval. Professor Chris Ham told us:

[...] there are always risks associated with a big reorganisation change of this kind because for a couple of years at least the people involved in that reorganisation are distracted from the core business. While they are reorganising the structures, the focus on improving care for patients and getting better efficiency will often take, sadly, second place.[93]

80. The King's Fund has stressed the important role that managers had to play in delivering both efficiency savings and a successful reorganisation:

Leadership time and capability need to be dedicated to furthering the QIPP agenda and ensuring effective implementation, while also taking forward the radical changes to the organisation of the NHS that are in the pipeline. This will not be easy at a time when substantial cuts are being made to management costs. It is vital that the contribution of managers and leaders of local systems is recognised alongside the drive to empower frontline clinical tariffs.[94]

81. Nigel Edwards of the NHS Confederation told us 'some of the managerial control systems and other more standard techniques that we have relied on in the past to get financial balance may work less effectively, because of the changes that are happening'.[95]

82. Sir David Nicholson assured us in Committee that he was aware of these risks and would be taking appropriate action, recognising that although the reorganisation was unusually 'bottom-up' and 'fluid', there was a need for 'more stakes in the ground'.[96] Specifically, he told us that:

there is no doubt in my mind that in some ways we are going to have to centralise more power in the very short term to deliver the benefits in the medium and long-term [...] we will have to take a very tight rein in relation to the management of finance.[97]

This tight control would be supported by the new Operating Framework in December and the preparation over the next few months of detailed plans for individual organisations.

We welcome Sir David's recognition of the need for close financial oversight during this transition period. We believe there must be more detail in the Operating Framework and over the coming months on the exact nature of these controls and, in particular, how they will address the transitional arrangements from PCTs to commissioning consortia.

83. It is important to recognise that these changes are already happening and that the absence of a clear plan risks undermining both a logical approach to the savings programme and the opportunity to use this process to develop higher quality services for patients. The new Operating Framework needs to provide this narrative.

84. We have already discussed the importance of selling the challenge as making efficiency gains rather than simply 'cuts'. Unfortunately we are increasingly hearing examples that fall into the latter category. At the time of writing, increasing numbers of news stories were appearing in the media about PCTs struggling to meet costs and services being rationed. Pulse reported on 23 November that many PCTs were 'warning their plans rely on huge cuts and 'spending all contingency funds''[98]; the Yorkshire Post has reported that North Yorkshire PCT will be ceasing to offer IVF treatment to new patients, stopping minor surgery at GP clinics, and delaying non-urgent hospital treatment[99]; while the local press in Kent is reporting that the Eastern and Coastal Kent PCT has ordered GPs to delay referring to hospitals 'low-priority' treatments (such as hip and knee replacements and some cases of cataract surgery) in an effort to ease pressure on beds and cut overspending.[100] In terms of job losses, the RCN has already identified almost 18,000 NHS posts at risk in England,[101] while UNISON noted "already there are reports coming through of hundreds of jobs being threatened across the country".[102]

85. The BMA told the Committee: 'We are already seeing that, in some places, the challenge is not being addressed in a terribly evidence-based or logical way, in that you are relying on happenstance of people retiring or leaving the service to try and make savings. What you will need, if you are going to try to achieve the sort of savings that are talking about, is a fairly massive reconfiguration of the way services are delivered'.[103]

86. Dr Carter argued that the process was being handled in a way that could serve to complicate the problem: 'Our fear is that what we are going to see is a squeeze on the acute hospitals without the reinvestment in the community infrastructure, which is going to make a difficult situation even worse'.[104]

87. Although the Secretary of State rejected the suggestion that PCTs were in meltdown,[105] it is evident that the impending reorganisation is already affecting the functioning of certain PCTs. Sir David Nicholson acknowledged that it was 'a big challenge' to deliver the efficiency programme in such a context, especially away from the pathfinder consortium[106] sites:

If you were to ask me whether I think we can sustain 152 independent PCTs between now and 1 April 2013, I would say that we cannot. Increasingly, in parts of the country, we see that we cannot do that now. That is not to say that we want to abolish them, or that we would abolish them statutorily, but we need to make arrangements so that we can pool the capacity that we've got. Hence, in London, they're looking at clustering organisations together and having one management team to run a series of PCTs. I have absolutely no doubt that that will be the model across the country as a whole. So, you will see PCTs being clustered together with single management teams in order to sustain the management capacity, both to enable them to devolve the responsibilities to the local government and consortia and, on the other hand, to enable them to hold on to the accountability chain, which is going to be so critical for us over this period.[107]

88. Sir David Nicholson has acknowledged the risks of delivering the efficiencies programme over the transition period to the new NHS structures, and we are encouraged by his determination to maintain tight financial controls during this time. However, we are concerned that there has been a lack of co-ordination in the period since the White Paper was published, and the Government has not communicated a clear narrative to support PCTs and other NHS organisations in implementing the reforms.

89. To compound the problem of these indirect costs and risks, the direct cost of the reorganisation remains unclear. The National Audit Office's recent report on machinery of government changes examined the costs and risks of such changes, and concluded that reorganisation costs tend to be significant; that the ability of central government bodies to identify reorganisation costs was very poor; and that central government bodies were weak at identifying and systematically securing the benefits they hoped to gain from reorganisation.[108] It is important that the NHS reorganisation does not follow this pattern.

90. The analytical strategy for the White Paper discusses the factors that will contribute to the cost of the reorganisation,[109] but at the time of writing, the Government had not produced an estimate of the cost of the reorganisation, beyond the statements of redundancy costs mentioned above. The Government has made reference to the figure of £1.7 billion that derives from the requirement originally set out in the NHS Operating Framework for 2010-11 (under the previous Government) for PCTs to set aside 2% of funds for the purposes of non-recurring 'service transformation' costs. In a Westminster Hall debate on the implications of the Spending Review for the NHS, Simon Burns MP, Minister of State at the Department of Health, stated that the Government recognised 'that amount of money as money that can or could be used for reorganisational purposes'.[110] Although this sum may be earmarked for 'service transformation' purposes, it pre-dates the current Government and cannot be regarded as an accurate estimate of the costs of implementing the specific proposals of the White Paper.

91. The estimate of reorganisation costs of £2-3 billion, as proposed by Professor Kieran Walshe of the Manchester Business School,[111] has been widely cited, and may provide a more accurate indication of the reorganisation costs. Ultimately it is for the Government to demonstrate that it has made its own assessment of the reorganisation costs, to publish these figures, and then monitor the actual costs against their budget.

92. The cost of the White Paper reorganisation emphasises the need to achieve the higher end of the £15-20 billion of efficiency savings identified in the Nicholson Challenge. These costs must be clearly identified and planned for, if the spending challenge is to be achieved. It is unfortunate that the Government has not yet provided even a broad estimate of the likely reorganisation costs; and it is unhelpful for the Government to continue to cite the £1.7 billion figure, as it does not relate to their specific proposals. The next round of White Paper documents must present a clear assessment of the likely costs, both direct and indirect, and demonstrate how they are to be accommodated into wider spending plans.

53   HC Deb, 11 November 2010, col184WH Back

54   Office of Budget Responsibility: Economic and Fiscal Outlook, Cm 7979, 29 November 2010 Back

55   HC Deb, 7 December 2010, col 163. Back

56   Ev 82 Back

57   King's Fund response to the Spending Review, 20 October 2010,; Ev 119 (NHS Confederation); Ev 112-113 (British Medical Association); Nuffield Trust briefing, NHS resources and reform: Response to the White Paper Equity and Excellence: Liberating the NHS, and the 2010 Spending Review. October 2010, p9. Back

58   NHS, NHS Chief Executive's Annual Report for 2008-09, May 2009, p47. Back

59   The King's Fund and Institute for Fiscal Studies, How cold will it be? Prospects for NHS Funding: 2011-17, July 2009.  Back

60   Q 22 [Sir David Nicholson] Back

61   The King's Fund. Improving NHS Productivity - more with the same, not more of the same, July 2010, p2. Back

62   Q 237 Back

63   Q 250 Back

64   Office for National Statistics (2010). Public Service Output, Inputs and Productivity: Healthcare, p1. Back

65   Q 389 Back

66   The King's Fund, July 2010, Improving NHS Productivity - More with the same not more of the same, p9. Back

67   Q 392 Back

68   Q 15 Back

69   Department of Health, Equity and excellence: Liberating the NHS, Cm 7881, July 2010, p47. Back

70   Q 137 [Mr Macalister-Smith] Back

71   Q 398 [Mr Douglas, Sir David Nicholson] Back

72   Q 399 Back

73   Q 356 Back

74   Q 146 [Mr Edwards] Back

75   The calculated price for a unit of healthcare activity, under the Payment by Results scheme, as paid by PCT Commissioners to treatment providers (i.e. acute hospitals). Services such as mental health and community care are currently excluded from the tariff. Back

76   Q 79. Unlike in previous years, in 2010-11 there was no uplift in tariff prices and a 3.5% efficiency requirement was imposed to cover pay and price inflation. Back

77   In 2010-11 the PCT announced opening allocation was set at £80bn [National Audit Office, Briefing for the House of Commons Health Select Committee - Health Resource Allocation, December 2010, p8]. 44.8% of primary care trust expenditure was spent on general and acute secondary care [Ibid, p17], which would be equivalent to £35.8bn of that £80bn.  Back

78   Q 138 Back

79   Ev 120 Back

80   Q 389 Back

81   HC Deb, 12 July 2010, col 663. Back

82   Oral evidence taken before the Health Committee on 20 July 2010, HC (2009-10) 380, Q 1  Back

83   Q 359 Back

84   Q 34 Back

85   Oral evidence taken before the Treasury Committee on 1 November 2010, HC (2010-11) 544-II , Q232 Back

86   Q 349. Back

87   Uncorrected transcript of oral evidence taken before the Health Committee on 19 October 2010, HC (2010-11) 513-i, Q 92 Back

88   Department of Health, Equity and Excellence - Liberating the NHS: Analytical Strategy for the White Paper and associated documents, p14. Available at:  Back

89   The Nuffield Trust briefing, NHS resources and reform: Response to the White Paper Equity and Excellence: Liberating the NHS, and the 2010 Spending Review. October 2010, p3 Back

90   Q 243 [Dr Carter] Back

91   Department of Health, Equity and excellence: Liberating the NHS, Cm 7881, July 2010, p11. Back

92   Q 44 [Sir David Nicholson] Back

93   Uncorrected transcript of oral evidence taken before the Health Committee on 16 November 2010, HC (2010-11) 513-ii, Q 246. Back

94   The King's Fund, Improving NHS Productivity - more with the same not more of the same, July 2010, p27. Back

95   Q 144 [Mr Edwards] Back

96   Q 373 [Sir David Nicholson] Back

97   Q 371 [Sir David Nicholson] Back

98   Pulse website, 10 November 2010, GPs face debt crisis as PCTs fall £300m into the red, Back

99   Yorkshire Post, 22 October 2010, Services axed as care trust battles huge debt. Back

100   This is Kent, 12 November 2010, Health chiefs block non-urgent operations in bid to save money and keep beds free. Back

101   Royal College of Nursing, Frontline First Interim Report, November 2010, p5. Back

102   Q 239 [Mr Collis] Back

103   Q 233 Back

104   Q 277 [Dr Carter] Back

105   Q 377 Back

106   Sites in the pathfinder programme, whereby groups of GP practices (consortia) are supported in taking forward GP commissioning of services ahead of the formal transfer from PCTs under the White Paper timetable. Back

107   Q 372 Back

108   National Audit Office, Reorganising Central Government, HC 452, Session 2009-10, March 2010. Back

109   Department of Health, Equity and Excellence - Liberating the NHS: Analytical Strategy for the White Paper and associated documents, p5. Available at: Back

110   HC Deb, 11 November 2010, col 179WH. Back

111   Professor Kieran Walshe, Reorganisation of the NHS in England, BMJ 2010; 341:c3843 (16 July 2010): Back

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