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Government shuns NHS cost-cutting plan

The government has rejected cost-containment proposals for the health service including job losses and a recruitment freeze

The government has rejected proposals from management consultancy McKinsey and Company, to slash the NHS workforce in England by 10 per cent by 2014.

Proposals by McKinsey to cut 137,000 clinical and administration posts, freeze recruitment and establish an early retirement programme, would have resulted in savings of £20bn by 2014.

The Department of Health (DH) rejected the plans on the grounds that many health service departments need more staff, not less.

McKinsey was invited by DH officials to come up with proposals on how savings could be made across the health service. In addition to the drastic job cuts and a recruitment freeze, the management consultancy also said that £3bn could be saved each year by improving staff productivity, and almost £2bn could be saved on external contracts for services such as food and waste.

The decision has polarised opinion among commentators. Health minister, Mike O'Brien and Karen Jennings of Unison, think that any moves to cut jobs would reduce efficiency in the health service further. In addition, Jennings criticised the proposals, saying they were the "same old formulaic answers" that have been mooted previously.

However, John Appleby, chief economist at the King's Fund said that changes were needed and businessman Gerry Robinson, who presented a BBC series about the health service, said that there was too much waste in the NHS and jobs had to go.

With real term cost-cutting predicted after 2011, it seems unlikely that the government will be able to stave off a radical shake up of the system indefinitely.

3rd September 2009

From: Healthcare

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