Intended for healthcare professionals


Labour acts to cut NHS costs

BMJ 1997; 314 doi: (Published 31 May 1997) Cite this as: BMJ 1997;314:1569
  1. John Warden, parliamentary correspondent
  1. BMJ

    The new British government made its first moves last week to change the NHS, although the BMA and others in the field regard the changes as more cosmetic than creative. They include deferring the next round of GP fundholders to save £120m ($192m) and an £80m cut in management costs, to release an extra £10m to treat breast cancer.

    These changes will honour Labour's commitment in its manifesto to reduce management costs by £100m this year. But they are no longer coupled to a pledge to trim hospital waiting lists by 100 000 in the face of new figures showing that lists rose by that amount in the previous year, to a total of 1 164 400.

    Also implicit in the new strategy is the attenuation rather than the abolition of GP fundholding. New fundholders are still envisaged beyond 1999, but with extra budget restraints. Entry to fundholding is being moved to a two yearly cycle, with the eighth wave-due in July-being deferred for a year, affecting about 1000 family doctors. Applications already approved will stand.

    The health secretary, Frank Dobson, said that his aim is to reduce management costs quickly. Taxpayers' money, he said, must be used to treat patients, not to sustain dense forests of paperwork that had resulted from the internal market system. NHS managers have to agree target reductions by the end of June.


    Britain is to impose an immediate ban on the use of landmines and destroy its stock of the weapons by 2005, the government announced last week. Foreign secretary Robin Cook said that Britain would strive for an international ban on landmines.


    The chairman of the BMA Council, Dr Sandy Macara, said that the planned savings fall far short of what is needed. Health service managers described the plan as a knee jerk reaction and warned that redundancies were inevitable.

    Details of Labour's programme include:

    • Fundholding-Entry is moved to a biennial basis, though a new option of entering general practice commissioning groups will become annual. Equity between fundholding and non-fundholding GPs will produce a “level playing field.” In-year cuts in fundholding budgets can be made to ensure fairness in elective treatment when hospitals are under pressure from emergency activity. Overspending by fundholders is to be met from uncommitted savings or budget cuts in subsequent years. Windfall savings to be returned.

    • Management-Savings in management costs will be redeployed into patient care-specifically, to reduce waiting times for patients with cancer. Bureaucracy will be reduced, with a shift from individual to multiple invoices, selective rather than total checking of invoices, and lump sum payments for “cost per case” contracts with adjustments later. Further savings will focus on function change, such as mergers of NHS trusts. Staff cuts will be by natural wastage rather than redundancy.

    • Cancer treatment-The initiative on breast cancer is the first step towards reducing waiting times for patients with cancer. An extra £10m this year will be shared between regions, based on action plans already in place to improve the speed of diagnosis and access to treatment for breast cancer. More than half of patients with cancer now wait at least two weeks for admission to hospital.

    • Waiting lists-The number of patients waiting to be admitted to hospital in the first quarter of 1997 rose by 59400 (5.4%) over the previous quarter. Those waiting over one year increased by 9200, to 31300, and under one year by 50200, to 1133100. Health minister Baroness Jay said that this was a legacy that the government had inherited and which would affect patients for a long time to come.