NHS Tayside’s chief operating officer is confident the board will achieve £30 million savings this year despite concerns the target could not be achieved.
Health chiefs heard on Thursday there was a “high risk” of failure to achieve the cost reduction targets in 2010/11, despite savings of £22.5 million, because the shortfall was £7.5 million in June.
Health board director of finance Mr Ian McDonald had warned the continuation of expenditure trends experienced to June 30 and the current savings shortfall without the appropriate intervention through the new Steps to Better Healthcare programme could lead to a “substantial overspend” at the year end.
However, NHS Tayside’s chief operating officer Gerry Marr said the shortfall has already been reduced from £7.5 million to £5 million through a range of efficiency initiatives being made without job losses.
The approved strategic financial plan contained an efficiency savings target for 2010/11 of £30 million, which is equivalent to 5% of the board’s general allocation. The efficient government target of 2.0% is included within the goal.
Speaking after a meeting of the board’s finances and resources committee meeting at King’s Cross Hospital in Dundee, Mr Marr said, “The target last year was £30 million and we have already identified £25 million of that and we’re confident of reaching a break-even position by the end of the year. Those savings were made up of a number of things.
“Every year the Scottish Government sets you a task irrespective of the financial conditions of 2% efficiency. We believe that in any year no matter what the allocation is we can achieve a 2% more efficient service and we have done that year on year for the last nine years.
“That 2% is done through efficiencies that do not impact on the services that we provide. This year we have began to take a more medium-term view on a programme called Steps to Better Healthcare.
“That’s us looking to provide services in a better way to patients that would actually cost less and in the first four months of the year we are seeing a saving in the order of £5 million and that’s the big thrust of our programme.Sensible control”The rest is made up of sensible control over overtime and agency excess of manpower costs, that you could organise yourself differently and achieve better savings.
“We are doing a big piece of work on getting a better price for what we actually pay for products and goods. So all these different things are combining to add up to the £25 million that we have put in the bank already.”
Mr Marr said they have still to find £5 million by March 31 which must be made against the backdrop of honouring the commitment from government of no reductions or job losses.
“Approximately 65% of our costs are represented by staffing so it’s about a more efficient way of organising the service,” he added.
“The big message of Steps to Better Healthcare is about facing up to the challenge that we can actually deliver a high-quality service at lower costs and the first four months of that programme has been really encouraging.”
Finance director Colin Masson told the committee an extra £120,000 has been saved in the three months to June by cutting back on supplementary staff and bank nurses.