Westminster Hall debate: Operational productivity in NHS providers - Dr Matthew Offord
This page contains background information for the Westminster Hall debate, Operational productivity in NHS providers, on Wednesday 1 July 2015, including a Library summary, parliamentary questions and press material.
The title of the debate refers to the Lord Carter's review of productivity in hospitals, and the interim report of this review, Review of Operational Productivity in NHS providers, which was published on 11 June 2015. The debate is also expected to cover the use of agency health professionals within the NHS, and measures to monitor and reduce NHS spending on agency staff.
Lord Carter of Coles was appointed by Health Secretary Jeremy Hunt to chair the NHS Procurement and Efficiency Board in June 2014, and to review the operational productivity of NHS hospitals to establish the opportunity for efficiency savings across the NHS. To do this Lord Carter and the review board worked with a group of 22 NHS providers across England.
On 11 June 2015 an interim report was published, outlining the work that has been carried out, and interim recommendations and next steps. A full report is expected to be published in the autumn.
The interim report suggest that the NHS in England could look to make savings of up to £5bn per annum by 2019/20 and reported three major areas of opportunity:
- hospitals getting a stronger grip on the utilisation of their resources, particularly in the four areas: workforce, hospital pharmacy and medicines, estates management and procurement.
- achieving greater productivity in hospital workflow (how patients move through the system) and the subsequent use of assets such as operating theatres.
- gaining a better understanding of the need for hospitals to develop sub-acute services- either on their own or in collaboration with others, to facilitate discharge of patients.
The Secretary of State for Health has also asked the Care Quality Commission's Chief Inspector of Hospitals to look at use of resources as part of his inspections of NHS hospitals. This work – which will be developed as part of CQC's new strategy for 2016 onwards – will focus on organisations' ability to deliver high quality patient care that is also efficient and sustainable:
http://www.cqc.org.uk/content/cqc-begin-work-assessing-use-resources-nhs-hospitals
On 2 June 2015 the Secretary of State announced a number of measures to address concerns about cost of agency and consultancy staff employed by the NHS including:
- Setting a maximum hourly rate for doctors and nurses;
- banning the use of agencies that are not approved;
- putting a cap on total agency staff spending for each National Health Service trust in financial difficulty; and
- requiring specific approval for any consultancy contracts over £50,000.
Financial controls are due to be implemented from 1 July, as set out in Department of Health press notice and a letter from DH to NHS organisations:
https://www.gov.uk/government/news/clampdown-on-staffing-agencies-charging-nhs-extortionate-rates
The House of Commons Library’s Key Issues for the 2015 Parliament also contains a section on NHS funding and productivity.
Further press releases and articles
Please note: the Library is not responsible for either the views or accuracy of external content.
Hospital productivity report shows how NHS can make large savings
Department of Health, 11 June 2015
Lord Carter says hospitals could save billions of pounds by better use of staff, medicines, supplies and more efficient processes.
NHS could save £5bn a year on workforce and supplies, says report
Guardian, 11 June 2015
Increasing staff efficiency in hospitals by just 1% could save the health service around £400m, Carter review finds.
Simple steps 'could save NHS £5bn'
BBC, 11 June 2015
The NHS in England could save £5bn a year with improved staff organisation and a better approach to purchasing, a review will say.
Is NHS being overcharged by agencies – or are staff shortages the real issue?
Guardian, 3 June 2015
Jeremy Hunt is trying to cut the NHS’s bill for temporary staff by introducing curbs on employment agencies, but is he missing the point?
No more £3,500-a-shift doctors, Jeremy Hunt tells NHS
Guardian, 3 June 2015
Health secretary demands reduction in use of employment agencies and claims some are ripping off the health service
It's time to crack down on rip-off NHS agencies
Telegraph, 2 Jun 2015
This government has pledged at least £8bn more for the NHS, but we need to make sure that money is being spent effectively
Providers welcome partnership to control NHS agency staff and consultancy spend
NHS Providers, 2 June 2015
Parliamentary questions NHS: Temporary Employment Asked by: Haigh, Louise | Party: Labour Party
To ask the Secretary of State for Health, how much the NHS has spent on temporary staff in each of the last three years.
Answering member: Alistair Burt | Party: Conservative Party | Department: Department of HealthNational Health Service spend on temporary staff for 2012/13, 2013/14 and 2014/15 as included within the Q4 data collection is shown below.
2014/15 Q4 data collection
Unaudited (£ billion) 1
2013/14 Unaudited
(£ billion) 2
2012/2013
(£ billion) 3
Total NHS Spend
3.34
2.61
2.33
Following the Francis4 report many trusts increased their spend on temporary staffing to meet safe staffing levels. The Department expects trusts to have a strong grip on their finances, and manage their contract and agency staffing spend (including use of locums) responsibly through effective and efficient workforce planning and management and to minimise temporary staffing costs in future years.
The Government is clear that the current rate of spending is unsustainable. The Secretary of State has announced a comprehensive package of measures to address the problem including:
- setting a maximum hourly rate for doctors and nurses;
- banning the use of agencies that are not approved;
- putting a cap on total agency staff spending for each NHS trust in financial difficulty; and
- requiring specific approval for any expensive consultancy contracts over £50,000.
1 The 2014/15 figures reflect data collected from NHS trusts and foundation trusts as part of the Q4 data collection which is unpublished and unaudited. Whilst this data would not ordinarily be provided as part of a Parliamentary Question contribution, it has been included within this response as both Monitor and NHS Trust Development Authority have separately released data relating to temporary agency staff spend. It should be noted that their figures vary slightly from those included above. These figures may also be subject to revision as part of the 2014/15 final audited accounts production, and should therefore not be used once the final published Department of Health Annual Report and Accounts.
2 For the first time, the Department collected unaudited financial data from NHS trusts for 2013/14 on Contract and Agency staffing costs and income to give a net expenditure figure. The data was collected on the NHS Summarisation Schedules that form the basis of the Department’s Annual Report and Accounts.
3 The 2012/13 figures included in the 2013/14 published accounts have been included in the same table; however they were compiled on a different basis to the 2013/14 figures. The figures published for 2012/13 for trusts are based on non-permanently employed staff which is defined as “others engaged on the objectives of the organisation and will include staff on inward secondment or loan from other organisations, bank/agency/temporary staff and contract staff.” This reconciles to the figures for those organisations in note 3 (Staff Costs 2012/13), whereas the 2013/14 figures were compiled for the first time under a stricter definition of contingent labour.
4 http://www.midstaffspublicinquiry.com/
04 Jun 2015 | Written questions | Answered | House of Commons | 189 Asked by: Gwynne, AndrewTo ask the Secretary of State for Health, what plans NHS England has to reduce the cost of agency staff to the NHS in England.
Answering member: Alistair Burt 09 Jun 2015 | Written questions | Answered | House of Commons | 632 NHS: Temporary Employment Asked by: Berger, LucianaTo ask the Secretary of State for Health, what estimate he has made of how much the NHS spends on agency and contract staff.
Answering member: Alistair Burt 04 Jun 2015 | Written questions | Answered | House of Commons | 677