Cuts, cuts, cuts

The Commons public accounts committee published a report today about the results of the last attempt at "efficiency savings". The New Statesman says:

The report warns that only £15 billion of the £35 billion of savings identified in the 2007 Spending Review have been achieved, and only 38 per cent of those were considered "legitimate value-for-money savings". The Communities department, for instance, which faces cuts of 51 per cent - the largest of any department - has made only £40m of savings against a target of £987m.

£15bn out of £35bn is 43%. Let's use the more optimistic 43% than their measly 38% (a little bit of illegitimacy can be excused).

The NHS is supposed to find £20bn of "efficiency savings" by 2014. We are told that the money saved will be re-invested in the NHS. The NHS needs a 5-6% real terms rise just to stand still and so some of this rise must come from the re-invested "efficiency savings". £20bn over four years is about £5bn a year, or about the 5% needed to stand still. That is why Osborne only gave the NHS 0.085% increase each year, the rest that the NHS needs has to be found in the money from "efficiency savings". The big if here is can the NHS get 5% more efficient each year for four years? The evidence from the public accounts committee suggests not.

43% of £5bn is £2.1bn a shortfall of £2.9bn. So if the 2007 spending review is replicated with the 2010 CSR it would mean that the NHS will have £2.9bn less each year. Hence this indicates that the NHS funding will be cut by about 3% every year. It certainly looks like we are heading towards the usual Tory situation of patients on trolleys in corridors. Bastards.