Headlines: January 24th, 2012

The magnitude of the challenge facing the health and social care services has not been fully grasped. Plans to meet the challenge are unlikely to deliver the result. This is the conclusion of the Parliamentary Health Committee in its report published today.

The health service is required to make savings of £20b over four years. But these savings must be achieved against a background of demographic pressures, rising public expectations and medical advances. Evidence to the Committee suggested that NHS organisations are focusing on trimming existing processes rather than developing new ways to deliver services. They are squeezing services to get through the first year. A common practice is to salami slice budgets.

The Committee believes that there is a need to do things differently. New ways of working need to be developed. This will involve significant change in the care model.

Evidence presented to the Committee on social care portrayed the system as close to collapse, if not fundamentally broken. It is not able to properly respond to the demands on it. Councils are making savings by the expedient of artificially reducing demands on the service by restricting eligibility. Savings have also been made on other local authority functions and by forcing down the price paid to contractors for services. In each case, the scope for further efficiencies is severely limited.

Integration of health and social care services provide opportunities for greater efficiency savings, but evidence from the Audit Commission shows that integration and working more closely with the NHS was one of the least common ways of achieving savings. There is progress on joint commissioning and pooled budgets, but the two services are separately funded. One is local authority funded, subject to a means test, and the other is NHS funded, not subject to any means test and free.

The Committee believes that the health and social care bill currently before Parliament is complicating the push for efficiency gains. It is creating disruption and distraction that hinders the ability of organisations to consider truly effective ways of reforming service delivery and releasing savings.