Public Expenditure - Health Committee Contents

2 Introduction

2. Following the Spending Review settlement of 20 October 2010 the NHS does not face budget reductions on the scale of other departments but the challenge facing the NHS is still substantial. The settlement has left the health service needing to make unprecedented levels of efficiency savings if it is to maintain levels of care and improve the service it provides. Some have argued that this process will be complicated, delayed or even thwarted by the planned restructuring of the NHS.

3. There is even greater pressure on the social care sector, which is also required to make unprecedented efficiencies. The intensity of the pressure on social care could have an impact on the ability of both services to realise the significant savings that could result from better integration of health and social care.

4. The scale of the challenge is daunting, and the risks of non-delivery are significant. Achieving these ambitious aims will require leadership and innovation. In particular, delivery of these objectives will be impossible without the active engagement of the clinical and managerial staff in the NHS.

5. We believe there is an urgent requirement for the Government to provide a clearer narrative on how this challenge will be met; how services will be changed; and the model of care that will be delivered.

6. In this inquiry, we have inevitably concentrated on financial controls and efficiency gains. It is important, however, to retain a focus on the experience of patients and clinicians. Efficiency gains unavoidably involve change and it is important that the process is managed in a way which retains the confidence of patients and clinicians.

7. The Committee is conducting a parallel inquiry into the future of commissioning which represents an important part of this restructuring. We do` not therefore intend to comment in detail on the White Paper proposals in this report, beyond observing that a key consideration in its assessment of those proposals will be their ability to facilitate the delivery of the efficiency gains required by the Spending Review settlement.

8. Successful delivery of this efficiency gain is fundamental to securing the core social policy objective of the NHS—equitable access to high quality healthcare; the size of the NHS budget relative to total government expenditure also makes it fundamental to the delivery of the Government's wider economic policy objectives.

9. This Report is intended to present a snapshot of the key implications and risks arising from the Spending Review. It will provide an overall context for our subsequent inquiries.

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Prepared 14 December 2010