NHS productivity falls as cuts loom

THE National Health Service (NHS) was one of yesterdays biggest losers in the Budget as health secretary, Andy Burnham, announced £4.35bn in cuts for the department by 2013.

The NHS plans to make the savings by moving civil servants out of London, reducing the amount of consultants used and driving down the cost of procurement.

The news came as official data published yesterday showed productivity in healthcare fell by 3.3 per cent between 1995 and 2008.

The data, from the Office for National Statistics (ONS), found a mismatch between inputs and outputs, leading to an annual productivity fall of 0.3 per cent on average.

This means there was a drop in the amount of NHS activity for every pound spent on publicly funded healthcare, mainly the NHS.

Inputs refer to the volume of goods and services, including clinical supplies, and spend on staff including nurses, doctors and support workers. Healthcare inputs grew by 75 per cent, averaging 4.4 per cent growth a year, the ONS data showed.

But healthcare output grew by just 69 per cent overall, averaging 4.1 per cent growth a year.