The health department spends £116,900,000,000. £5,500,000,000 of that is on new buildings and equipment, and £12,500,000,000 is on pensions. The new GMS contract has cost an extra £8,000,000,000.
The Health department has an administrative budget for itself and its helpers of £218,000,000. This buys us 2245 staff, including 17 staff paid more than £150,000 a year and 54 staff paid between £100,000 and £150,000. There are a further 3536 staff in agencies.
Beneath the Department are the Strategic Health Authorities. Their budgets run to £6,000,000,000. The national quangos include the Office for Strategic Co-ordination of Health Research, the National Institute for Health Research, the National Institutue for Health and Clinical Excellence, the Care Quality Commission., the NHS Litigation Authority, the Medicines and Healthcare products Regulatory Agency, the NHS Purchasing and Supply agency, the Council for Healthcare Regulatory Excellence, the Health Protection Agency, the National Patient Safety Agency. the NHS business services Authority and the NHS Institutute for Innovation and Improvement!
There should be plenty of scope to amalgamate, streamline and remove bits of all those. The Litigation Authority now has a budget of £1.1 billion. Raising quality would cut the costs of this very large complaints department. Maybe we should ask whether it is wise to have so much litigation against ourselves, as it is our NHS. Wouldn’t it be possible to have a cheaper and simpler Independent Adjudicator who made quicker and cheaper settlement of grievances against the NHS?
When I ran the Welsh Health Service I streamlined the top of the system and saved substantial sums by doing so. For example, I removed the pay twice approach I inherited of having both a Permanent Secretary to the Health department and a CEO of the NHS, by amalgamating the posts and getting rid of one of the offices. I asked the pharmaceutical companies to deliver the drugs directly to the hospitals, to remove the need for an expensive purchasing and warehousing business within the NHS itself. Cutting out central warehousing and a supplies department saved money, cut stocks, and meant the hospitals were using more recent pharmaceuticals. We still got the drugs at the same prices.
The drugs bill is large, amounting to £8,000,000,000 for GP prescribed drugs and £3,500,000,000 for drugs in hospitals. We do not want to deny people drugs they need, and may need to add a few more to the list. What we also need to do is to cut down the waste which comes from overpresribing or prescribing to people who do not want to take them all. We need infection control systems which rely more on thorough cleaning and less on drug taking in hospitals. We need to use good generics where possible. We need to remove waste that comes from having to throw away out of date medicines from stock.
We need to ask whether we require such top heavy administrative systems as we currently have with Strategic Authorities as well as PCTs.