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Chancellor ‘doubles NHS efficiency target’

The government has doubled the annual efficiency expectation on the NHS, he has said, as systems and trusts grapple with large gaps in their financial plans for 2022-23.

The Treasury told the media over the weekend the Chancellor was doubling the NHS’s annual savings target to 2.2% from 1.1%. Reports said this would deliver an annual saving of £4.75bn. 

It is unclear whether the move represents a change to the underlying efficiency expectation in NHS planning — which would require all systems and trusts to revise their plans for 2022-23 — or is simply a re-statement or recognition that the effective efficiency requirement was already well above the 1.1 per cent envisaged under the pre-covid NHS long-term plan.

Rishi Sunak told the Mail on Sunday the move was linked to the “health and social care levy” which will see a rise in National Insurance next month. He also said he would chair a new cabinet committee to reduce waste in the public sector.

Speaking ahead of his Spring Statement on Wednesday, he said: “Your readers should be reassured that unlike any other tax that they pay, every penny of this levy goes specifically to the thing that they care most about… So we are setting up a new Cabinet committee, that I am chairing, to focus on efficiency, value for money, waste and reform. Working with the health secretary we are doubling the efficiency target for the NHS. Every pound from this levy is going to go incredibly far.”

In NHS England’s annual report, published last month, its chief executive Amanda Pritchard said: ”The certainty we have recently received on both capital and revenue budgets for the years ahead provide a welcome basis on which the NHS nationally and locally can now plan. We should however be under no illusions that the challenges ahead – for financial balance and operational performance – are anything other than unprecedented.”

Read full story (paywalled)

Source: HSJ, 20 March 2022


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