The pounds 130m to be saved will mean "more white coats and fewer grey suits", Stephen Dorrell, the Secretary of State for Health, said yesterday, as he published league tables showing four- to five-fold variations in how much NHS trusts spend on management. Insisting that the money would be spent on patient care, Mr Dorrell said the savings, which are required by his Budget settlement for the NHS, were "challenging but achievable".
Mergers of health and family health services authorities will reduce management spending by more than pounds 26m next year on top of this year's pounds 14m saving, Mr Dorrell said. In addition, NHS trusts are being required to reduce their management costs by 5 per cent, saving just over pounds 100m in real terms.
On top of a string of savings from slimming down the Department of Health and the NHS Executive, and abolishing regional health authorities, the move will produce a total of pounds 300m in reduced bureaucracy by 1997 compared to the amount spent last year, Mr Dorrell said. "We are winning the war against bureaucracy. I regard it as jobs transferring out of administrative work into patient care."
The league tables show wide variations in management spending between trusts - from 2.1 per cent of its budget by the Chelsea and Westminster hospitals and the Freeman group in Newcastle upon Tyne to a reported 10.8 per cent by the Royal London Homoeopathic and 7.9 per cent spent by the Royal National Hospital for Rheumatic Diseases. The average spent by trusts was 3.9 per cent, but significant numbers spent 6 per cent or more.
Health authorities also show three-fold variations in management spending last year from more than pounds 10 per head of population in Huntingdon, the Prime Minister's constituency, to pounds 3.20 in Bristol.
The league tables come with detailed health warnings that like has to be compared with like. Some variation in management spending is acceptable. Health authorities' costs can vary as a result of dealing with more trusts, managing widespread change, and having a population with a high rate of turnover. Trusts also vary by type - larger trusts tending to make economies of scale - and smaller ones tending to have proportionately higher costs.
Harriet Harman, Labour's health spokeswoman, condemned the attack on red tape as a sham. "It is the Tories themselves who created the bureaucracy that they are now pretending to attack," she said - adding that it was fitting that John Major's health authority, was at the bottom of the league.
Noel Flannery, deputy director of the Institute of Health Services Management, said his organisation agreed that management costs should be reduced. But the figures provided only "a very basic snapshot" and said nothing about the quality of management.Reuse content