Success in improving NHS productivity 'virtually static,' says Audit Commission

No progress has yet been made towards achieving the huge savings that will be necessary in order to maintain the NHS's services over the next four economically-constrained years, a report says today.

Patterns of spending and activity across the health service showed "few signs of change" in the first year of the efficiency drive, according to the Audit Commission, and key markers of success in improving productivity had remained "virtually static."

The gloomy verdict came as Andrew Lansley, the health secretary, declared full steam ahead for the biggest reform programme in the NHS's 62 year history, involving the transfer of responsibility for 80 per cent of the NHS budget from managers to GPs.

But his refusal to amend the Government's plans, barring a few technical tweaks, drew angry responses from medical organisations who accused him of ignoring concerns about the "pace and scale" of the £3 billion reforms.

The NHS has been set a target of saving £15-£20 billion by 2014, in order to meet the growing demand from an ageing population and advances in treatment, at the same time as implementing the reforms, while its income in real terms is expected to remain flat.

Publishing the Government's response to the consultation on the reform proposals, which drew 6,000 comments, Mr Lansley announced cash increases of between 2.5 per cent and 4.9 per cent for Primary Care Trusts next year, slightly more than was expected.

Getting the best value from the budget meant "cutting out waste, reducing bureaucracy and simplifying NHS structures so that we are able to invest more in improving frontline care," he said.

Critics said Mr Lansley was expecting the NHS to deliver savings of 4 per cent a year for the next four years - a scale never before seen - at the same time as implementing major structural reform. The size of the challenge was underlined yesterday by the Audit Commission which said emergency admissions to hospitals continued to grow at 3 per cent a year and the number of outpatients was also rising.

Andy McKeon, managing director of health at the Audit Commission, said trusts could save £200 million a year by doing more day surgery and up to £500 million by cutting nurses in line with the most efficient hospitals - but they remained no more than aspirations."It takes time to turn the tanker but there was little sign of these changes beginning to happen in 2009-10," he said.

Among a welter of complaints, the British Medical Association delivered one of the most angry responses to Mr Lansley's plans.

Hamish Meldrum, chairman of BMA council, said:

"There is little evidence in this response that the government is genuinely prepared to engage with constructive criticism of its plans for the NHS. Most of the major concerns that doctors and many others have raised about the White Paper seem, for the most part, to have been disregarded. The response completely fails to acknowledge that proposals to increase competition in the NHS will make it harder for staff to work more co-operatively."

NHS Confederation chief executive Nigel Edwards said NHS organisations were grappling with three major issues at the same time: unprecedented efficiency savings, major management cuts and radical structural reforms.

"The scale of the challenge is immense. No one should be in any doubt that these reforms are both radical and high risk. In addition to the concerns about transition, there are also serious questions as to whether the reforms are sufficiently powerful to achieve what is claimed for them."

Responding to the Audit Commission, the Department of Health said it had introduced incentives to reward NHS trusts that did more day cases and reduced avoidable readmissions.