Reid Confirms £150m Savings From NHS Efficiency Drive, UK

Mr Reid was setting out the ALB budgets for 2005-2006.

He said:

"In November 2004, we made a commitment to reduce the ALB budget by £100m by April this year. I am pleased to report that the ALB budgets for 2005-06 will reduce Department of Health funding for them by more than £150 million.

"The resulting savings will contribute to our overall investment in NHS frontline healthcare. Taken together with growing efficiencies in services provided by ALBs to the wider NHS they place the sector on a firm footing to achieve the target of £500 million savings by the end of 2007-08."

The ALB change programme is part of a wider programme to improve efficiency and cut bureaucracy in the management of the NHS. The aim is to reduce the burden on the frontline and free up more resources for the delivery of frontline services to patients.

Mr Reid also confirmed that the Department of Health is on course to halve the number of ALBs by 2008. From 1 April, the number of ALBs will be reduced from 38 to 34, by another three during 2005/2006, and by April 2006 will be down to 24.

As part of this process The National Institute for Clinical Excellence will absorb the Heath Development Agency. The creation of the new organisation means a saving of £3.5m. Also on 1 April, the new Health and Social Care Information Centre will come into operation and will reduce burdens on the NHS frontline by better co-ordinating information requirements.

The HSCIC takes on functions previously carried out by the NHS Information Authority and the Department of Health. Closing down the NHS Information Authority and transferring its functions to HSCIC and NPFIT has reduced operating costs by £40m.

The Health Secretary set out the next stages in the programme to reduce bureaucracy in the NHS. He said that over the coming year the Department of Health will:

- Drive forward a number of major reconfigurations of ALBs so that total numbers in the sector are reduced to 24 by April 2006

- Maintain momentum towards releasing £0.5 billion for the frontline by the end of 2007-08 through further reductions in overall ALB budgets in 2006-07 and continued savings in the central services which ALBs provide on behalf of the NHS

- As part of this, put in place firm plans for delivering savings of £35-40 million a year by 2007-08 through efficiencies in ALB overheads ( for example back offices services and accommodation ), in line with the expectations set out in the Gershon Review.

- Make further reductions in the proportion of national spend on the NHS and social care which goes on inspection and regulation

Notes to editors:

1 ) Total DH funding for its ALBs in 2003-04 was £1265m. In the budgets announced today, DH funding has been reduced to £1057m for 2005-6. For this year, there was £50m of non-recurrent costs making a total saving of more than £150m.

2 ) In July 2004 the Secretary of State for Health John Reid announced the completion of a review of the Department of Health's ALBs and confirmed that it was now delivering:

- A 50 per cent reduction in the number of ALBs

- A saving of £500m in expenditure by ALBs by 2007-08

- A 25 per cent reduction in posts in the same period

3 ) This wider programme is to ensure that the increased investment in the NHS - 42% in real terms from 2003-04 to 2007-08 - is accompanied by modernisation that cuts out waste.

4 ) The total number of ALBs will have reduced from 38 in 2003-04 to 34 on 1 April and is on course to reduce further to 32 by 1 October this year.

The changes are -

- The Family Health Services Appeal Authority ( SHA ) ( FHSAA {SHA} ) will be dissolved on 1 April and its functions absorbed by the NHS Litigation Authority ( NHS LA ).

- The Health Development Agency ( HDA ) will be dissolved on 1 April and its functions absorbed by the National Institute for Clinical Excellence ( NICE ).

- National Clinical Assessment Authority ( NCAA ) will be dissolved on 1 April and its functions transferred to the National Patient Safety Agency ( NPSA ).

- The NHS Information Authority ( NHS IA ) will be dissolved on 1 April and certain functions transferred to the Health and Social Care Information Centre ( HSCIC ) and to the National Programme for IT ( NPfIT ).

- The National Radiological Protection Board ( NRPB ) will be dissolved on 1 April and its functions transferred to the Health Protection Agency ( HPA ).

- The Public Health Laboratory Service ( PHLS ) will be dissolved on 1 April and its functions transferred to the Health Protection Agency ( HPA ).

- The Human Tissue Authority ( HTA ) will be created on 1 April and work closely with the Human Fertilisation and Embryology Authority ( HFEA ) ahead of the merger of the two bodies to form the Regulatory Authority for Tissue and Embryos ( RATE ).

- The Health and Social Care Information Centre will come into being on 1 April to co-ordinate information requirements across health and social care.

- The National Programme for IT will become an Agency on 1 April.

- The NHS Modernisation Agency and NHSU are due to be dissolved by 31 July 2005 and some of their functions taken on by the new NHS Institute for Learning, Skills and Innovation which is due to be set up by the same date.

- The National Blood Authority and UK Transplant will be merged and become NHS Blood and Transplant by 1 October 2005.

- NHS Estates is being wound down and will be dissolved no later than 1 October.

5 ) For media enquiries only please contact Department of Health 020 7210 5301 or 020 7210 5435.

GNNREF: 112964
Issued by : DOH Press Office

Published on:
2005-03-19

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