Chief executive of NHS Improvement calls for reduced savings target

In his first interview as chief executive of Monitor, Mackey backed the calls for change, ahead of the Spending Review that will determine the 2016-17 efficiency demand on the health service.

In a bid to drive huge efficiencies out of NHS providers, the tariff has been cut by around four per cent annually over the past five years. Former Monitor chief executive David Bennet recently admitted he had personally failed to secure a balance of financial stress between providers and commissioners in the 2015-16 tariff, which resulted in providers facing a £2 billion deficit this year.

Bennet warned providers could face a maximum efficiency factor of two per cent from now onwards.

Mackey responded to the claim, saying he ‘broadly’ agreed that two per cent is ‘closer to what’s doable’ in 2016-17. However, he maintained that there were still better opportunities for greater NHS efficiency.

Mackey said: “We need to be able to get at that productivity opportunity. For this tariff round, and I hope maybe for a couple of years, we need a more realistic efficiency ask.”

The former Northumbria Healthcare Foundation Trust chief executive said: “I think the big thing for me is that when I was a provider, four per cent just looked beyond reach for most people [this year]. I think Northumbria will get close to that, but most people just didn’t feel they could do it.”

Mackey claimed he had recently had dinner with a group of provider trust chief executives, some of whom, were in debt for the first time.

He said: “Most of them were embarrassed about it, one of them was absolutely deeply ashamed of it, and if we get this right they can be quickly back into balance next year, and starting to do the things they need to do.

“This narrative [that] we’ve got a load of feckless managers out there who are just deliberately doing a crap job, it’s not right. Largely people want to do a good job, and actually not achieving the things they’ve delivered for 20 odd years is really painful, and it sends a really bad message.”

The chief executive acknowledged that the chances of the services having adequate finances were ‘heavily dependant’ on the Spending Review negotiations. However, Mackey maintained that many of the discussions he had had thus far were ‘much more realistic than I thought they were going to be’.

Furthermore, Mackey disputed predictions that the provider sector deficit would end up at £2 billion this year and suggested it would be possible to bring the figure down to £1.6 billion.

With regard to what could be done to reduce the deficit, he said: “There are some things we can do, and we’re working on now, that don’t involve really terrible rationing decisions. I would hope by the end of the month to be clear about what they are and what the impact is.”

Read more