Nursing job cuts highlight major problem with 'efficiency savings'

For those tasked with delivering the Government's cost savings, jobs may seem the easiest thing to cut...

Last Updated: 31 Aug 2010

We've heard a lot from the coalition Government about how it intends to reduce public spending without hurting front-line services. It's all about delivering more efficiently, we've been told. But however nice that sounds in theory, in most cases the Government will be devolving responsibility for those cuts down the chain - and for those tasked with slashing budgets, cutting jobs will often seem a lot more straightforward than re-engineering service delivery. Just look at the (supposedly ring-fenced) NHS, where a nursing union has just reported that 100 NHS trusts are planning to shed about 10,000 nursing jobs between them. Unfortunately, both in the NHS and beyond, managers are more familiar with the axe than the scalpel...

You’d have thought the NHS would escape relatively unscathed from the cuts row, since the Tories have been so desperate to maintain that they'd increase health spending in real terms throughout this Parliament (a pledge that people are increasingly grumbling about, given the scale of the cuts to other departments). However, Whitehall is - quite rightly - keen for the NHS to operate more efficiently, so funds can be diverted elsewhere. And ministers have apparently been told to save some £20bn off their £100bn+ budget by 2014.

The trouble is that the individual trusts - who have to find these savings - don't seem to be taking a terribly enlightened approach. The Royal College of Nursing has done a survey of 100 trusts, and discovered that 9,973 posts have been lost because of recruitment freezes, redundancies, and staff not being replaced when they leave. A large number are also planning things like compulsory redundancies and ward closures to save money - precisely what the Government was hoping to avoid. Yesterday health minister Anne Milton accused health trusts of 'living in the past and interpreting efficiency savings as budget and service cuts... This is wrong.'

But this highlights the big problem with the huge cuts the Government is hoping to implement across the public sector: for the managers concerned, reducing headcount is the quickest way to slash budgets. Particularly (though not exclusively) in public sector organisations like the NHS, which have enjoyed real-terms budget increases for years, there's just no culture of operating smarter and more efficiently; managers just don't have any experience of it. What's more, they're unlikely to get much help from upstairs - and hiring consultants to help them is probably a no-no too these days. So they'll end up attacking what looks like lowest-hanging fruit, namely jobs, even though that will cause far more problems in the longer term.

Given the huge expansion of the NHS under New Labour - and since productivity hasn't risen in line with expenditure - there's clearly room for it to operate more efficiently. The same goes for other public sector departments. The question is: are those at the front line actually capable of delivering this? Maybe the outlook's not so bad for consultants after all...

In today's bulletin:

Nursing job cuts highlight major problem with 'efficiency savings'
Bolland off to a flier as M&S sales rise 3.6%
BP looks East - as US Government demands further concessions
£35m a year for the Business Link website? Really??
Helping businesses walk the walk on CSR

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