A report by NHS Providers says trusts recognise their responsibility to maximise efficiency but a different approach will now be needed.

Making the most of the money – efficiency and the long term plan says the current method of driving efficiency in the health service – setting an over ambitious, top level target and reducing the real terms prices trusts are paid for the care they provide, in the hope they will find further savings - is no longer sustainable.

The report says the forthcoming NHS long term plan, backed by the new funding settlement, can provide a vision for a transformed and sustainable NHS.

However the success of that plan will depend on the ability of the health service to deliver stretching levels of efficiency.

The current method of driving efficiency in the health service – setting an over ambitious, top level target and reducing the real terms prices trusts are paid for the care they provide, in the hope they will find further savings - is no longer sustainable.

   

Drawing heavily on survey findings and interviews with trust leaders, the report sets out in detail how trusts have risen to the challenge of improving efficiency in recent years. It also presents trust leaders’ views on where further opportunities lie, the main barriers to progress, and the support they need to make the extra funding for the NHS go further.

The report warns against repeating past mistakes of imposing unreasonable efficiency requirements, which are now leading to larger provider sector deficits. Trust leaders say they have realised the vast majority of readily available savings within their organisations. Instead, they are being forced increasingly to rely on unsustainable one-off measures such as land sales, vacancy freezes and delays to essential maintenance work. 

Trust leaders say the biggest, long term, efficiency opportunities now lie in better ‘system’ working. This is where trusts collaborate with commissioners, local councils and other partners to improve care for people in their communities, joining up the delivery of currently separate services.

Trust leaders say they have realised the vast majority of readily available savings within their organisations.

   

The report’s findings - informed by a survey of NHS leaders from mental health, community, ambulance and hospital trusts representing more than half (54 per cent) of trusts across England – reveal widespread concerns about their ability to sustain recent progress on efficiency:

• asked about the biggest opportunities over the next five years, nearly two thirds (61%) selected improved system working. Examples included effective working with partner organisations, investment in prevention and community services to reduce levels of more expensive acute care and pooling budgets;
• asked about the biggest barriers to improve efficiency, more than two thirds (69 per cent) cited the way financial incentives for trusts promote short-term thinking. A similar proportion cited operational pressures – services run less efficiently when they are overstretched;
• while most trust leaders (71 per cent) agreed there was waste in the NHS through inefficiency, many pointed out that it compared well with other health services internationally;
• fewer than one in five (19 per cent) were confident that their trust could increase efficiency savings over the next five years;
• just one in ten (10 per cent) thought their trust would be set a reasonable efficiency target for the next five years;
• only one in four (25 per cent) said they could safely continue to deliver efficiency savings at the same rate.

The chief executive of NHS Providers, Chris Hopson said: 

“This report highlights some of the fantastic work that trusts and frontline staff are doing to provide the best possible care for patients and service users while making funding for the NHS go further.

“The discussion on provider sector efficiency has often been conducted as a one way, top down, debate with NHS national system leaders setting the overall requirement and outlining areas where they believe efficiencies can be made.

“But it is front line NHS trust leaders who have to own that task and actually deliver the required savings. If they do not feel they are given a chance to have their say, then the potential for greater efficiency can be easily lost.

It is clear from this report that there are opportunities for further efficiencies – trust leaders recognise that – but their confidence in being able to deliver them is low.

“We therefore felt it was vital to give trust leaders a voice in the efficiency debate, particularly as national system leaders finalise the new NHS long-term plan.

“It is clear from this report that there are opportunities for further efficiencies – trust leaders recognise that – but their confidence in being able to deliver them is low. We cannot continue as we are, setting an unrealistic target and hoping that will deliver more savings. It just leads to increased provider deficits.

“Trusts believe that better system working, integrating services and addressing workforce challenges offer the greatest long term opportunities to improve the quality of care and use resources more efficiently.

Trust leaders must have a voice in developing these plans in partnership with national and local system leaders, to ensure they are realistic and can be delivered within a reasonable timeframe.

“Trust leaders accept their responsibility for delivering improved efficiency in the NHS. However they must have a voice in developing these plans in partnership with national and local system leaders, to ensure they are realistic and can be delivered within a reasonable timeframe. They will also need more support from national leaders to achieve efficiency gains at local system level where the greatest opportunities lie. And this work will have to be compatible with the ambitious list of other priorities that trusts will be expected to deliver such as providing outstanding care at a time of rising demand and workforce shortages.”

“Taking forward these ideas to make the most of the money in the NHS will require new thinking and a different approach from all of us. However, it is clear that NHS trusts are ready to meet that challenge.”

Read an accompanying article published in HSJ from David Williams, policy advisor - finance at NHS Providers. 

About the report:

The findings in the report are drawn from a survey of NHS trust leaders and structured in-depth interviews.

There were 157 responses to the survey from 122 NHS trusts. This constitutes 54% of the provider sector, and responses covered all types of NHS trust (acute, ambulance, community, mental health and learning disability, specialist and combined).