Trusts spending 10% on managers

Only top NHS salaries to be made public in wake of report
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Indy Politics
Virginia Bottomley, Secretary of State for Health, announced yesterday that NHS trusts are to be required to publish information about their management costs from September, after an Audit Commission report - A Price on their Heads - showed big variations in how much trusts spend.

Her decision, however, was attacked by Alan Milburn, Labour MP for Darlington, for obliging trusts to publish only their senior management costs - and not a broader definition which would show the full cost of running the NHS internal market.

The new figures show that trusts in England spend pounds 900m on senior management, an average of pounds 2.1m - 4 per cent of their total costs. When administrative and clerical posts are counted in, however, the figure rises to pounds 2.3bn or 10.5 per cent - and those figures exclude the management and administrative costs of health authorities and GP fundholders who purchase the care.

Although trusts vary in size the figures show that some are spending four times as much as others. Andrew Foster, controller of the Audit Commission, said: "These figures will put a downward pressure on management costs."

Margaret Beckett, Labour's health spokeswoman, said it was "a scandal" that bureaucracy now cost more than 10 per cent of NHS spending.

The commission has helped developed two main measures of management and administrative cost, known as M1 and M2.

M1 is the figure which trusts and the department will publish on a comparative basis, and includes senior managers earning pounds 20,000 a year or more together with other staff plainly in management roles who earn less. M2, however, will include more junior finance and administrative staff, including those who help run the NHS internal market.

Trusts will be free to publish both figures, but are only being required to publish the senior management costs - M1. Mr Milburn said: "Ministers must insist that the total managerial costs be published, otherwise the full costs of the NHS market are being hidden."

Mrs Bottomley welcomed the Audit Commission's report, claiming that the 4 per cent spent on senior management was "light by any standards", and that better management had significantly improved NHS performance. She added: "A modern NHS needs modern professional managers. Bureaucrat bashing may make headlines, but it does not help deliver high quality patient care." The abolition and merging of health authorities and a cut in the size of the Department of Health was already ploughing a further pounds 200m back into patient care, she said.

The question the Audit Commission's report does not answer is how far costs have risen in order to run the new-style NHS. The unreliability of the data "makes it impossible to draw firm conclusions about the extent or pace of any real growth" the commission said.

The new definitions, however, will in future allow comparisons over time, and the commission is working on measures of how effective management is. "Better ways of measuring what managers achieve are needed," Mr Foster said. At present it is difficult to assess whether more management expenditure would be wasted or worthwhile.