The government's White Paper Equity and Excellence: Liberating the NHS and the revision to the 2010/11 NHS Operating Framework that followed it shows the government's plan to reduce management costs by £850m (46 per cent) by 2013/14.
The King's Fund recently looked in detail at these issues as part of its Commission into Leadership and Management in the NHS.
How many managers are there in the NHS?
It is extremely difficult to find an accurate figure for the number of managers in the NHS, and most sources of information use different definitions for who is counted as a manager. Best estimates suggest that the NHS spends roughly £8 billion of its £100 billion budget on management and administration. The NHS Information Centre shows that there were about 43,000 NHS managers in 2009 (about 3.7 per cent of the total workforce), although this figure does not include many clinical managers.
How does this compare to other sectors?
According to the Office for National Statistics, the proportion of managers in the UK workforce as a whole in June 2010 was 15.4 per cent. These statistics also show that there were 77,000 hospital and health service managers across the United Kingdom, or 4.8 per cent of the NHS workforce. In other words, the NHS has a managerial workforce that is one-third the size of that across the economy as a whole.
The majority of managers in the NHS are employed in NHS provider organisations (hospitals, general practices and community services). Most of the management cuts in the NHS will come from the abolition of strategic health authorities and primary care trusts (PCTs) rather than from NHS providers. A submission to The King's Fund's Commission calculates that PCTs in England spend around 1 to 2 per cent of their budgets on management and 'only the most outstandingly frugal charities spend as little as 1 per cent of their turnover on management'.
Has the number of managers grown?
Using data from the independent Binley's Database of NHS Management, research by Manchester Business School for The King's Fund Commission on Leadership and Management in the NHS found that the numbers of NHS managers in England had risen by 37 per cent between 1997 and 2010 – a period in which health spending doubled in real terms.
While the number of NHS managers has grown in England since 1997, figures for the other three countries of the United Kingdom are static or falling. There may be a range of reasons for this, but since 1997 England has seen a plethora of policy initiatives that have increased the requirement both for management and administration. These include targets for waiting times; new regulators; published measures of hospital and PCT performance; expensive staff and patient surveys and more extensive contracting out of a wider range of support services than in Northern Ireland, Scotland or Wales.
Is it a myth or a fact?
Myth. The NHS in England is a £100 billion-a-year-plus business. It sees 1 million patients every 36 hours, spending nearly £2 billion a week. Aside from the banks, the only companies with a larger turnover in the FTSE 100 are the two global oil giants Shell and BP. If the NHS were a country it would be around the thirtieth largest in the world.
If anything, our analysis seems to suggest that the NHS, particularly given the complexity of health care, is under- rather than over-managed.