Today’s Gershon report, “Releasing resources to the front line: Independent Review of Public Sector Efficiency", has said that IT reform is critical to the NHS achieving its target of saving of £6.8bn by 2008.

The report was published on the same day that Chancellor Gordon Brown announced the Treasury’s 2004 spending review in Parliament, which promised an increase of 7.1% in healthcare funding. A total of £4.5bn is being spent in ICT investment to modernise services in policing, education and healthcare.

Gerson recommends that “better use of staff time (accounting for up to half of efficiencies)” is made through “the implementation of a modern ICT infrastructure in the NHS. Electronic patient records, appointment booking and prescription transfer will mean less wasted time spent checking patient information, fewer letters to type and send, and no lost prescriptions."

Existing investments, such as electronic patient records as implemented by the national programme for IT (NPfIT), will deliver savings when their benefits are fully realised, the report argues, although this should be done with “the full involvement of front-line staff and appropriate process redesign."

The report also suggests that NHS finance, ICT and HR departments be “rationalised” so that they share back-office services, “particularly in primary care".

However, the report is scant on details of figures; Gershon does not suggest how much overall savings will be made by the implementation of the NPfIT, although recommendations are made that other departments follow the NHS Purchasing and Supply Agency’s recent forays into e-auctions, which saved £12.7m in procurement of IT hardware.

The report also notes that the Department of Work and Pensions (DWP) was the first to invest heavily in IT reform and modernisation and achieve savings. The DWP will undergo a staff cut of up to 40,000 posts by April 2008; a large proportion of the 104,000 job losses announced by the Chancellor.

Cuts will also take place at the DH; 720 civil servants at the DH will lost their jobs by 2008, and another 1,110 jobs will be relocated out of the south-east of England.

The report can be downloaded from the Treasury website here. (375k, PDF)