The NHS is facing the biggest financial challenge in its history. Following real-terms increases averaging 7 per cent since the turn of the century, the NHS budget will grow by just 0.1 per cent a year until 2014/15.
The Spending Review also committed the NHS to delivering up to £20 billion a year in efficiency savings by the end of this period. It must achieve this while grappling with rising demand for services from an ageing population and cost pressures that are squeezing local budgets.
What are the aims of this programme?
Although some hard decisions will need to be taken, evidence shows that there are opportunities to improve productivity at every level of the health system without making major cuts in services.
Getting the best value from every pound the NHS spends must be a single-minded focus for everyone working in the NHS. The aim of our Quality in a Cold Climate programme is to support the NHS in delivering productivity improvements and continuing to enhance the quality of services for patients.
The scale of the productivity challenge
The Quality in a Cold Climate programme began with a series of research and policy outputs that analysed the scale of the productivity challenge facing the NHS and the opportunities to address it:
- In July 2009, we published How cold will it be? Prospects for NHS funding: 2011-2017. Undertaken jointly with the Institute for Fiscal Studies, this report examined different funding scenarios to outline the scale of the financial challenge facing the NHS.
- In December 2009, we published the results of a simulation exercise to explore the impact of the economic downturn on the health system in Windmill 2009: NHS response to the financial storm.
- In July 2010, we published Improving NHS productivity: More with the same not more of the same, which analysed the size of the productivity gap facing the NHS and the strategies available to tackle it.
- In March 2011, we published Reconfiguring hospital services: lessons from South East London, which considered whether reconfiguration of hospital services is an appropriate response to the need to drive up quality and drive down costs.
Opportunities to improve productivity
Our report NHS productivity: More with the same not more of the same highlighted opportunities to improve productivity at every level of the health system. The next phase of the Quality in a Cold Climate programme will focus on evaluating the evidence about specific interventions in three areas:
- reducing variations in clinical practice
- managing demand through effective commissioning
- increasing workforce productivity
We will focus on evaluating the evidence about specific interventions in these areas. Our aim will be to provide clear assessments of the options available to improve productivity and practical support for clinical leaders, commissioners and managers to help them do this. We will also examine how best to measure productivity at the local level.