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PRESS INFORMATION

FOR IMMEDIATE RELEASE 4 MARCH 2013

NHS spending on independent healthcare services up over 10%, but disparity across sectors


In their penultimate operational year PCTs across England increased their spend on services commissioned from independent healthcare providers by 10.7%. This compared to a 3.5% increase in total healthcare spending from NHS and non-NHS providers.

According to Laing and Buisson’s new NHS Financial Information 2013*, total NHS spending on healthcare services supplied by the independent sector in England - covering private companies and voluntary organisations - was estimated at £5.9bn in 2011/2012 - some 6.5% of the £90.7bn total healthcare spending by PCTs in England during the period. This marks decent overall growth from the £5.3bn spend in 2010/2011, then equivalent to 6.1% of total spending.

Driving this increase was strong growth of over a third in spending on independent community health services (£1.5bn), energised by the end of direct provision by PCTs during the year. It was further supported by strong growth in general and acute health service spending, which rose by nearly a fifth to be £1.6bn.

However, not all health sectors fared well.

PCT spending on primary care services supplied by independent sector providers fell sharply by over a quarter (26%) to £84m, while there was another sharp decline in spending on learning difficulties (down 12%), and spending on mental healthcare was static.

Spending more than any other PCT on independent healthcare services, Birmingham East and North PCT increased its spend by 10% in 2011/2012 to reach £201m. Surrey PCT was the next highest at £185m but increased its spend by an even larger 14%. Increased dependency on the independent sector was most notable from Nottingham City where spend was up from £85m to £136m, and Cornwall and Isles of Scilly, up from £77m to £120m. Meanwhile there was no real increase in dependency in Hampshire, and Yorkshire, (see Table 1 below).

Consultancy spending more stable

Spending on consultancy services by Trusts was more stable in 2011/2012, showing only a small real decline following sharp cutbacks a year earlier which were fuelled by the NHS goal to realise massive cost savings by 2014 under a new commissioning structure. In England and Wales the NHS spent an estimated £466m during the year, compared to £457m a year earlier but still well down from consultancy spend of £605m in 2009/2010.

New commissioning arrangements underpin reduced spending by most PCTs, which overall moved down from £138m to £110m, and saw Strategic Health Authorities spend noticeably less, moving from £36m to £24m.

Notable examples include City and Hackney Teaching PCT which spent £7.9m in 2010/2011 but only £4.7m in 2011/2012, and Oxfordshire PCT, down to £4.9m from £7.3m. However, against this trend Westminster PCT more than doubled its spend from £4.7m to £12.4m, the highest of any PCT. Similarly, Wandsworth PCT moved sharply up from £1.9m to £7.6m.

Unaffected by a new NHS structure, however, was the use of consultants by NHS Trusts and Foundation Trusts, as their combined spend increased strongly from £278m to £325m, driven by leading London Trusts. The largest single spender here was King’s College Hospital NHS Foundation Trust, which increased its spending by close to a third from £24.6m to £32.3m. The second largest was Guy’s and St Thomas where consultancy spend went up by 50%, rising from £10.7m to £16.8m. Barts moved from £5.5m to £8.8m. Outside London a notable climber was East Sussex Hospitals Trust which spent £4.9m in 2011/2012, compared with less than a million a year earlier.

NHS private patient incomes up ahead of inflation


NHS Financial Information 2013 also reports that total private patient income of NHS Trusts in the UK was £471m in 2011/2012, increasing by 5.3% from £448m in 2010/2011, edging ahead of economy inflation. However, regional trends confirm that growth was stronger in London, with the Top 5 private earners (Royal Marsden, Royal Brompton & Harefield, Guy’s & St Thomas, Moorfields, and King’s College) seeing combined revenues climb by 15%. Health and social service Trusts in Northern Ireland also reported strong growth (up 9.5%), but conversely, private patient income fell sharply for the NHS in Scotland (down 18%), and in Wales (down 8%).

 

TABLE 1: SPENDING ON INDEPENDENT HEALTHCARE SERVICES1 (PRIVATE & VOLUNTARY inc ISTCs)

Top 10 Primary Care Trusts   Spending £ million     
Annual Growth
2011-2012
 BIRMINGHAM EAST AND NORTH PCT 201.4 10.2
 SURREY PCT 185.4 14.0
 HAMPSHIRE PCT 176.8 2.5
 LEICESTERSHIRE COUNTY AND RUTLAND PCT          
139.7 7.8
 NOTTINGHAM CITY PCT 135.9 60.5
 CORNWALL AND ISLES OF SCILLY PCT 119.6 55.2
 EASTERN AND COASTAL KENT PCT 103.3 2.4
 BRISTOL PCT 102.4 28.4
 NORTH YORKSHIRE AND YORK PCT 93.3 1.2
 LEEDS PCT 82.8 1.6 
 TOP 10 TOTAL 1,340.6 15.2

1 Covers Primary Healthcare, Learning Difficulties, Mental Illness, Maternity, General & Acute, Community Health Services, and Other Secondary Healthcare.

-    END OF RELEASE –

*NHS Financial Information 2013 presents financial data for all NHS (& HSS) Trusts and Boards in the UK, including statement of comprehensive income, statement of financial position, cash flow, staffing volumes and staff costs, temporary (non-NHS) and permanent (NHS) staffing, expenditure breakdown, non-NHS spending, efficiency savings, and other information. For the second successive year it includes Hospital Activity Data.

Provided as a series of Microsoft Excel spreadsheets the dataset it priced at £895 (+VAT). Discounts are available for healthcare providers and academic institutions. Available from Laing & Buisson, 29 Angel Gate, City Road, London, EC1V 2PT. Tel: 020 7833 9123. Web: www.laingbuisson.co.uk


FOR FURTHER INFORMATION:

Philip Blackburn    Justin Merritt
Laing & Buisson                 
Laing & Buisson
Analyst   Operations Director
Tel: 020 7833 9123   Tel: 0207 841 0049
philipb@laingbuisson.co.uk   justin@laingbuisson.co.uk

                          

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