NHS England will hold discussions with every trust about the potential for cutting of its non-clinical workforce early next year, writes HSJ.
NHSE will hold discussions with every trust about the potential for cutting their non-clinical workforce early next year.
The announcement was made by NHSE finance director Julian Kelly at the organisation’s board meeting yesterday. Mr Kelly was addressing the productivity measures that would have to be taken in light of next year’s tight financial settlement for the NHS.
He warned that next year’s envelope would have to cover all costs including pay deals and elective recovery.
He told the board: “We need to focus next year to get all boards to look at their [workforce] establishment, and the establishment growth they’ve had over the last four or five years.”
It was particularly important for this to happen “in their support and admin sides”, which he had claimed had “grown in percentage terms faster than other areas”.
He concluded: “We just have to ask people – is it all necessary?”
Mr Kelly said NHSE officials would meet with each trust board to show them the data on potential productivity improvements in workforce and other areas. Mr Kelly told the board: “There isn’t really going to be new money for new activity. We’re going to have to do it through productivity, and even after that, I suspect we will face some tough choices. We are going through that exercise with the Secretary of State at the moment, he is really forcing us and the department to really think about everything we do and make sure the money is being spent on things that matter.”
The NHSE finance board report said next year’s revenue budget was set to grow by around 2 per cent above inflation. However it said this will need to cover “all costs including final pay settlements set out by government and the costs of recovery including all elective activity and unavoidable costs such as new treatments approved by the National Institute for Health and Care Excellence.”
This year’s deficit approaches £1bn
The finance report revealed NHS systems had built up an unplanned deficit of £851m by the end of October. This compares to £471m at the same time last year.
The report said this was due to slow progress on efficiency and overall headcount, including bank and agency spending, being higher than planned. It added: “To support the overall financial position, NHSE is making further cuts to offset system overspends and we are continuing to bear down on system spending.”
Despite the size of the deficit, the report said providers and systems were expected to “deliver the financial plans approved by their boards for the year.”
It added that: “Meeting these plans will require systems to deliver cost improvement plans of £9.3 billion (equivalent to 6.9 per cent of their total allocation); and an aggregate reduction in staffing costs by addressing bank and agency spend compared to 2023-24. At month 7, systems have delivered £4.1bn of savings.”
Mr Kelly said: “We do remain substantially concerned around a few systems, where the evidence is their plans are not robust, and they are not turning it around… We will need to look at what the next steps are, to effectively achieve turnaround.”
In the current year, more than £10bn of the £12bn additional funding announced by the Chancellor is being eaten up by pay and pension costs, with non-pay inflation and elective activity costs taking up the remainder.
Source: HSJ
Date: 9 December