The health service must retain experienced leaders able to work with doctors, nurses and other clinicians to provide the best possible care
Paying for new drugs and treatments and meeting the demands of an ageing population requires that the NHS finds £20bn of efficiency savings by 2015. Never has the need for effective leadership and management of resources in the health service been more apparent.
It is all the more worrying, therefore, that the government's NHS reforms involve deep cuts in management posts. Even in advance of the controversial health and social care bill becoming law, the number of health authorities and primary care trusts has been reduced, resulting in the exit of many experienced NHS leaders. Thousands more will leave in the coming months, as these organisations prepare for their abolition in a year's time to be replaced by the new NHS Commissioning Board.
The loss of managers creates a real risk that financial control will be lost and quality of care and patient safety will suffer. This is partly because of the departure of experienced individuals through retirement, redundancy or simply disillusionment with top-down reforms many consider unnecessary; and it is partly the result of far-reaching changes to the organisation of the NHS that are already well advanced. These changes have distracted managers from the core business of improving patient care when this should be the priority.
Analysis carried out by the King's Fund health thinktank in 2011 found that there was no evidence that the NHS is over-managed. The proportion of managers in the NHS workforce is not excessive compared with other sectors of the economy, and NHS funding has grown much more rapidly than the number of managers in the last decade. With an annual budget of £100bn and a workforce of over 1 million, the NHS must retain experienced leaders able to work with doctors, nurses and other clinicians to provide the best possible care.
Our analysis of the evidence led us to argue that while the NHS is not over-managed, it is certainly over-administered. This is because of the policy of successive governments to increase the regulation of standards and performance and to bring about improvements in care through the use of "targets and terror". NHS organisations have employed more staff to deal with the demands of greater regulation and tighter performance management, and their numbers can only be cut if politicians are serious in their stated intention to reduce central control of the NHS.
Equally important has been the emphasis placed in the English NHS on the use of choice and competition to improve patient care. The separation of commissioner and provider roles and the use of contracts have undoubtedly contributed to the increase in management costs through the appointment of staff to deal with transactions in the NHS market.
The NHS in the rest of the UK has been able to avoid many of these costs by relying on planning rather than competition. The current reforms will add to the complexities of the English NHS, as the use of competition is extended and more independent providers are encouraged to offer care to NHS patients. The challenge here is that the government's cuts in management costs have been targeted mainly at NHS commissioners, meaning they are unfairly constrained compared with providers who decide for themselves how much of their budgets to spend on management support.
Commissioning has been the weak link in successive NHS reforms over the past 20 years and the limits placed on spending by commissioners will do nothing to avoid history repeating itself. Populist appeals to reduce bureaucracy and put resources directly into patient care may attract favourable headlines, but they risk undermining the effective implementation of the very policies on which the government's successful stewardship of the NHS depends.
A service as big and complex as the NHS cannot be run on the cheap. A reasonable proportion of the budget must be used to employ skilled staff to manage budgets and people, and to provide strategic leadership. Now is the time for ministers to start praising managers, rather than seeking to bury them.
• Professor Chris Ham is chief executive of the King's Fund The Guardian
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