The Health Committee review of Public Expenditure in health and social care published its report on public expenditure today, highlighting that service integration to deliver the Nicholson Challenge is more important than management change.

Chair of the Health Select Committee Stephen Dorrell MP said: "The Nicholson Challenge is the key issue facing the health and care system. The fact that there is another bill going through Parliament changing the management structure of the NHS means that there is a tendency for every comment about the NHS to be framed by the debate about the bill.

"But the NHS is well used to management change. In reality the key pressures which are building in the system arise from the fact that demand is continuing to grow at a time when health and social care budgets have stopped growing.

"This development has been well signposted. The implications were first highlighted by Sir David Nicholson in May 2009, and endorsed by both the previous government and the Coalition. This report is a review of progress within the health and care system towards meeting that challenge.

"The NHS funding challenge can only be met by rethinking and redesigning the way health services are delivered now, in order to deliver lasting long term benefits."

The Health Select Committee's December 2010 Report on health expenditure expressed concerns then about the ability of the health service and local authorities to make the demanding efficiency gains required of them by the 2010 Spending Review, while maintaining quality of care.

Dorrell said: "Both the NHS and local authorities are struggling to meet current targets in a sustainable, long-term manner that will maintain high quality, efficient care in the future.

"The need to provide high-quality and efficient services that meet local needs within the funding available must be addressed as a matter of urgency. This requirement underlies the importance of developing new structures which deliver genuinely integrated services."

The King’s Fund: A wake up call
Responding to the report, John Appleby, chief economist at The King’s Fund, said: "The Committee is right to stress that meeting the Nicholson Challenge is the most important priority facing the NHS, despite the headlines generated by the health reforms.

"The report should serve as a wake up call for ministers and the NHS about the magnitude of the task ahead. If delivering the productivity improvements required is challenging now, it will only get more difficult during a financial squeeze that is set to last several years.

"We share the Committee’s concern that too much emphasis is being placed on finding short term financial savings instead of delivering real improvements in performance and productivity. This is a big challenge but there remain significant gains to be made by tackling unwarranted variations in NHS performance.

"Changes to hospital services in some parts of the country are now a necessity, not an option. While recent announcements signal a welcome willingness from ministers to embrace the reality of this, this should be followed by an honest dialogue with the public about the need for change.

"As we pointed out in our recent report about the situation in London, it is also not clear who will be responsible for leading major reorganisations of services under the proposals set out in the Health and Social Care Bill.

"The report also lays bare the challenge for local authorities struggling to maintain social care services in the face of cuts to their budgets, once again hammering home the case for acting on the Dilnot Commission’s proposals.

"As the Committee points out, a more ambitious approach is needed to promote health and social care integration - this should focus on pooling local budgets and, potentially, moving towards a single assessment of the funding needs of the NHS and social care."

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