The problem is that this is not an extra half a billion, indeed, it is unclear whether this money exists at all. HSJ reporter, David Williams attempted to get the Department of Health to explain where this money would come from (see 2.09 on the HSJ Live Blog):
A DH spokeswoman told me the cash is 'coming from DH underspends and efficiencies'. The department doesn't have a breakdown of exactly what these efficiencies are, or how much any given saving scheme is expected to generate, although she did say: 'We have quite a big drive to reduce administration spending'.Note that this is from the department underspends, not NHS underspends:
The spokeswoman confirmed that the money would come from within the DH's departmental expenditure limit - so isn't new money going into the department from the Treasury. She also said it wasn't going to come out of the NHS commissioning budget, so taking the department at its word, this wouldn't be a reallocation of funds already being spent on NHS care to the most under pressure areas. The savings necessary to pay for the bailout haven't been made yet - they are being made in 2013-14. And if all that sounds a bit vague, remember they're planning to find the same amount again in 2014-15.The spokeswoman confirmed to David Williams that this was not new money, the Treasury that has already pocketed billions from NHS underspends in the last few years is not going to give any of that money back. She also confirmed that the money would not come out of the commissioning budget - that is, the money that goes to CCGs and NHS England to commissioning services. So this is not a raid on CCG budgets like Osborne did a couple of months ago with his surprise announcement of funding for integration. Instead, this £250m a year for two years will come from the Department of Health's own allocation - the money it is given to run the department and few other public bodies:
So where's this money going to be made available from? According to DH's business plan for this year, its total budget is £110bn, but £94.2bn of that goes straight out again to NHS England, to be spent on commissioning NHS services. Most of the rest goes to other organisations such as Public Health England, Health Education England, and local councils. Just £3.9bn is identified as 'DH programme and admin expenditure'. Of this, 'admin funding' accounts for just £230.8m - meaning that even if the DH stopped administrating altogether, it couldn't save enough money to pay for the A&E bailout. 'Programme funding' comes to £3.5bn, of which £381m is capital. Programme funding pays for the chief medical officer's work, the external relations directorate, and the following acronyms: PHD; ERD; SCLGP; GOA; and SFNHS.The list of initialisations at the end of this are a bit obscure, however, the DH Corporate Plan gives a clue to the work of these divisions and projects in the department. ERD is involved in improving care, delivering the Secretary of State's Care Priority and delivering the government's response on the Mid Staffs inquiry. GOA is associated with NHS estates and facilities. PHD is concerned with screening, long term conditions and the public health strategies to reduce smoking, alcohol consumption and obesity. SCLGP is associated with development of the "No Health Without Mental Health" strategy; improving the quality of life of people with dementia and improve health outcomes for children and young people. SFNHS is associated with cutting costs through strategic financial planning.
It is unclear whether it is possible for the DH to save 8% on the chief medical officer's work and the projects mentioned in the last paragraph, which leads to the sentence about admin funding:
Of this, 'admin funding' accounts for just £230.8m - meaning that even if the DH stopped administrating altogether, it couldn't save enough money to pay for the A&E bailout.This is the Parsa solution. Whereas Parsa pledged to save £1.6m by getting all Hinchingbrooke's paper products for free, Jeremy Hunt will save £250m by not paying anyone in the Department of Health!