Lord Mawhinney – 2016 Parliamentary Question to the Department of Health

The below Parliamentary question was asked by Lord Mawhinney on 2016-09-14.

To ask Her Majesty’s Government how many provider NHS trusts achieved an improvement in operating efficiency of four per cent or more without aggravating their debt position in the last financial year.

Baroness Chisholm of Owlpen

There is no nationally agreed metric for operating efficiency. However, an annual efficiency requirement is built into the tariff uplift calculation that is used by commissioners in their contract negotiation with providers. In 2015-16 this efficiency requirement was 3.5% over 2014-15. Therefore, we can assume that organisations are delivering this efficiency if they improve their financial position based on these efficiency adjusted prices.

In February 2016, the Department published Lord Carter’s Operational productivity and performance in English NHS acute hospitals: Unwarranted variations report, a review of efficiency in hospitals which provided details of how operational savings can be achieved. A copy of the report is attached. This programme, along with ‎additional funding provided by the government, will help reduce deficits in this year and bring the sector back into financial balance in future years.

The National Health Service will receive additional funding of £10 billion per year by the end of the current Spending Review period, with £3.8 billion provided in 2016-17 alone. From this £3.8 billion, we have created a £2.1 billion Sustainability and Transformation Fund that will help providers move to a sustainable financial footing.

NHS Improvement’s 2016-17 quarter 1 performance report confirmed that things are improving in this year, with lower levels of deficit, fewer trusts reporting a deficit and savings on agency staff.