The Department of Health – learning its lessons

Yesterday the National Audit Office (NAO) published one of its Departmental Overviews - this time the Department of Health (DoH), summarising its performance during the period 2011-2012 based on NAO work.

It makes fascinating reading, not least because of some of the top line statistics:

  • that the DoH spent £104.8 billion, mostly through primary care trusts, during 2011-2012
  • that an NHS wide census was required to find out that at 30 September 2011, there were 1.35 million staff in the NHS workforce
  • that £7.2 billion was paid in pensions to around 701,000 people during 2011-2012
  • that to keep pace with demand and live within its tighter means, the NHS needs to make recurrent efficiency savings of up to £20 billion over the four-year period 2011-2015, of which £17.4 billion of potential savings have been identified
  • that twenty-one NHS foundation trusts finished the year 2012 in deficit, and had a combined deficit of £130 million. A further ten NHS trusts reported a combined deficit of £177 million
  • that spending on health services in the UK more than doubled in cash terms in the last decade, growing from £53 billion in 2000-01 to £120 billion in 2010-11

But the overarching picture painted by the report is pretty bleak.  It describes the DoH as an organisation that needs to be better managed, have more transparent lines of accountability, have accurate management information, which must reform at all levels to improve efficiency and effectiveness, and where ‘urgent development areas’ have been identified in the DoH’s leadership and strategy.

But surely, of course running this huge organisation will require the right people, the right information, the right strategy!  It is depressing to think that the NAO is required to identify that an organisation of the size and scope of the DoH needs forethought and planning on an almost military scale, and that the DoH cannot self-improve without external drivers.  Perhaps this is symptomatic of the success of the NHS – it has grown and developed organically and now must be put into a sustainable yet effective framework to avoid inevitable future crises.  The report identifies that:  “The ability of departments to control costs and drive out waste requires professional financial management and reporting”, proving that the public sector must learn many of the lessons of the private sector, and making me wonder what they have been doing to date:  amateur financial management and reporting?  No wonder the DoH is an organisation seeking to avert breakdown and get its ‘business’ running successfully.

Finally, the report highlights that the Department did not meet the timetable set by HM Treasury to publish its annual report and accounts before Parliament rose for the summer recess.  The DoH ‘recognised that it underestimated the scale of the changes that were needed to guarantee delivery by the summer recess’.

Sadly I think the DoH may have underestimated more that the ability to deliver financial accounts to a given timeframe.

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