Around £3bn of NHS funding has been returned to the Treasury over the last two years, the Government has confirmed.

A spokesperson for the Treasury confirmed that the DH underspend in 2010-11 totalled £1.9bn. It also recorded an underspend of approximately £1.4bn in 2011-12.

A spokesperson for the Department of Health said the savings came as a result of “reduced inefficient spending” and reductions in “bureaucracy and IT”.

The billions returned to the Treasury come during an era of austerity for the NHS. It has been tasked with saving £20bn by 2014-15.

The £1.4bn returned last year comprised £866m revenue funds and £577m in capital funds, a Treasury spokesperson confirmed. The year before £1.2bn was returned in revenue funds and a further £700m in capital funds.

The Department of Health said that despite the billion pound returns, frontline services had actually risen by £3.4bn in 2011-12. Of the £1.4bn which DH failed to spend in the last financial year, only £316m has been carried over for it to use in 2012-13 – of which the Department claims has been used to “fund vital projects across the NHS to benefit patients.”

Hospitals across England are struggling to deal with real term cuts in funding imposed by the Government as part of its efficiency savings, the NHS’ economic regulator has warned.

Trusts across England are forecasting cuts of more than 8% over the next three years as the Government attempts to meet its target of saving £20bn by 2015.

But following a review of trusts’ three year plans Monitor said that hospitals need to make “significant changes” beyond efficiency savings to remain financially sustainable.

The review found that hospitals may be forced to reduce services in an attempt to meet financial targets – despite being tasked with treating the same amount of patients.

Hospitals across England have started to reduce their cost base by an estimated £7bn to meet Government targets. However, Monitor expects trusts with hospitals built using private finance initiatives and small general hospitals to suffer the most when aiming to cut costs.

Andy Burnham, Labour’s Shadow Health Secretary, accused the Government of making a “major mistake” in imposing harsh savings targets instead of finding cost-savings efficiencies.

“Eyes were taken off the ball just when the NHS needed its full focus on the money and this report suggests the NHS has failed to get ahead of the problem,” he said.

“Senior civil servants complain of how hard they have found it to get the Secretary of State on the seriousness of the financial challenge – a damning indictment of his time in office. This failure to plan is resulting in an increasingly crude approach to reducing costs and panic measures. Ministers are in danger of losing control of NHS finances and urgently need to get a grip.”

The King’s Fund anticipates that the outlook for hospital finances are bleak over the course of the next three years but is unsure how the cuts will affect standards of care. “The question is to what extent that will translate into a cut in quality or in the amount of care hospitals provide,” said Professor John Appleby, Chief Economist at the King’s Fund

St George’s Healthcare Trust has launched a new dementia scheme to help raise awareness of patients with the condition in hospitals.

The Butterfly Scheme identifies patients who require additional support from healthcare professionals whilst in hospital and allows appropriate levels of care to be offered.

Jen Tulloch, clinical nurse specialist for dementia, said the scheme enables staff to “offer considerate and suitable support to patients with memory impairment”.

The Government highlighted the challenge the NHS faces in treating patients with dementia when it doubled its funding efforts to £66m earlier this year. Dementia was also chosen as one of the first four clinical networks established by the NHS Commissioning Board Authority last month.

As part of the initiative – which has been used in other hospitals around the country – patients and their notes are affixed with a sticker to identify their condition. Healthcare professionals also wear the same sticker to identify themselves to patients and their families should help be required.

The DH and the ABPI aim to achieve a new pricing system for branded medicines that reduces bureaucracy whilst being affordable, sustaining and responsive to the future needs of the NHS.

A joint statement from the two said that negotiations to replace the existing Pharmaceutical Price Regulation Scheme (PPRS) will begin next month and will include value-based pricing (VBP).

The two insist they are “committed” to reaching a new agreement that gives “patients better access to the most effective medicines”.

The new pricing scheme will cover the majority of branded drugs which will enter the market before 2014. It will operate under a similar but “evolved framework” to the existing PPRS.

However, the Government and the ABPI believe it is “important” for the new arrangement to provide “stability and predictability in the new framework” to ensure the NHS and the pharmaceutical industry manage financial and investment plans.

The statement said it is “vitally important” to continue the supply of innovative treatments to NHS patients and the ABPI “welcomes” value-based pricing alongside a renewed PPRS to “support this goal”.

Therefore, the statement said, VBP will be introduced in a “planned and progressive way” to focus on new medicines entering the market from 1 January 2014.

The Government aims to ensure the assessment of new medication is conducted as fully and early as possible for pharmaceutical companies to “predict well in advance” how products will “fare”.

The updated PPRS will also include a “statutory scheme” for companies that choose not to participate in the voluntary agreement.

Crossbench MPs have criticised the Government’s plans to reform the handling of the £5 billion NHS training budget.

The Health Select Committee welcome the principles around education, training and workforce planning but insist greater clarity is needed if the new arrangements are to be successful.

Stephen Dorrell, Committee chair, said that current arrangements are “complex, inflexible and unfair” and the NHS needs “much more effective arrangements for planning and training”.

The Committee backed the Government’s plan to create Health Education England alongside Local Education and Training Boards, and supported the remit given to the Centre for Workforce Intelligence.

But it said the Government “urgently needs to provide more clear and detailed information” on how these organisations will operate and work together in the future.

In its Education, Training and Workforce Planning report, the Committee advises that new arrangements for voluntary registration of healthcare assistants should be made compulsory.

More must also be done, the report said, to reconcile reduced hours for junior doctors; the NHS must ensure its training programme meets its own staffing needs; and workforce planning should avoid relying on locum or agency staff.

Finally, the report concludes, more detail is needed about how postgraduate medical deaneries fit into the new system under the Health and Social Care Act.

“A much greater sense of urgency is needed if service disruption is to be avoided and these good intentions realised,” said Stephen Dorrell.

Doctors should be more involved in the development of Clinical Commissioning Groups (CCGs), BMA chairman Dr Laurence Buckman has said.

Speaking at the Local Medical Committees Conference, Dr Buckman warns that the development of CCGs is continuing without the involvement of many ordinary GPs.

Dr Buckman insists that doctors should stand up to “regulation, bullying micromanagement and dissipated effort” as CCGs head towards authorisation.

CCGs are due to take over the responsibility for commissioning care from PCT clusters by April 2013.

They will need by authorised by the NHS Commissioning Board Authority before they become statutory bodies.

However, many GPs feel the Government has not kept its promises and are no longer in control of how CCGs are being developed.

“CCGs are ‘membership organisations’ as we keep on being told, they are our creatures not just another version of the PCTs they replace,” Dr Buckman said.

“GPs should be telling them what to do, not the other way round.  We were told it was going to be different… the Government needs to make it so.”

The BMA raised serious concerns during the passage of the Health and Social Care Act. The Association insists it continues to have “grave concerns” about the reforms, but will “ensure that implementation is evidence-based and sensible”.

Labour leader Ed Miliband has attacked the Government’s handling of the NHS reforms insisting they ignored the views of key healthcare professionals.

Speaking at the Royal College of Nursing conference, Mr Miliband accused the Government of pushing ahead with its controversial structural changes despite serious concerns from the RCN.

He said the Government had dismissed the RCN as “just a ‘vested interest’” but insisted they are actually the “defenders of the health service”.

“The government have been acting like they are the masters, not the servants, of the NHS,” said the Labour leader. “They are not the masters. Not this government. Not any government.

“Our health service is owned by patients, professionals and the people. And their voice – your voice – deserves to be heard.”

Mr Miliband added that he couldn’t promise to agree with the College on all matters but would not ignore them as the Government had done during the ‘listening exercise’ as part of the Health and Social Care Act.

Nurses were told that Mr Miliband wants to create a partnership with the College to address long-term challenges facing the health service. “I want to start working with you now to protect the values of the NHS and to hold the government to account for what’s going on,” he said.

“You are not just on the frontline in our NHS. You are the first line in the defence of our NHS.”

The Labour leader also revealed a new party initiative during his speech. NHS Check will allow staff and patients to report problems encountered by hospitals, clinics and GPs as a result of the NHS reforms.

Only half of CCGs will be given access to their full budgets by April 2013, Dr Michael Dixon, NHS Alliance, Chairman, has predicted.

Dr Dixon believes a lack of support from the Government and the NHS Commissioning Board will prevented GPs from engaging and being authorised for their full budget. He also said overly strict requirements would also stop certain groups from being established by next April.

Speaking in a New Year’s message to the HSJ, Mr Dixon said that Number 10 was not taking clinical commissioning “seriously”. He also claimed that Health Secretary Andrew Lansley and fellow health ministers were “lone voices”.

Clinical Commissioning Groups are scheduled to take over £60bn of the NHS budget when PCTs are abolished in 2013. But, if they are not in a position to do so, the NHS Commissioning Board will take on this responsibility or arrange suitable alternatives.

The Government has yet to reveal how it would plan to do this and Mr Dixon believes this scenario would create a two-tiered NHS.

The NHS Alliance chair called for the Government to fully support the move to clinical commissioning if it is to retain the support of those in favour of the switch. “The coalition government, as a whole, must put its full weight behind CCGs and CCG leaders,” said Dr Dixon. “If they do represent the future of the NHS then they must be explicitly recognised and celebrated as such.

“If government fails to recognise this and to recognise this fast then the heart and soul of clinical commissioning will walk. The prime minister and coalition government must see this as a crisis far beyond the importance of compromising with any self interested factions within or outside the NHS.”

In the message, Dr Dixon also raised concerns at the lack of CCG leaders which were involved in the design of the Commissioning Board. He warned that mistakes had not been learned ten years after PCTs were created and a lack of clinical engagement was sought.

The DH has published its second NHS Atlas of Variation in an attempt to help commissioners learn from each other and investigate when health outcomes do not reflect financial investments.

The 71 ‘map’ Atlas highlights the amount each PCT spends on clinical services in an attempt to make commissioners expose unwanted variations within the NHS.

Health Minister Lord Howe says the document will “help commissioners to identify unjustified variations and drive up standards”.

The first Atlas, which was published in November 2010, consisted of just 34 ‘maps’ and was welcomed by the NHS and other stakeholders, the DH says. It has now been downloaded more than 120,000 times with a further 10,000 hard copies requested.

The latest document will assist commissioners when considering the appropriateness of a service by offering comparisons in variations. Examples of differences highlighted in the Atlas include:

· A 25-fold variation in anti-dementia drugs prescribing rates across England

· Patients with type II diabetes are twice as likely to receive the highest standard of care in some areas of England in comparison to others

· There is an eight-fold variation in the range of patients receiving angioplasty treatment for a severe (STEMI) heart attack.

Lord Howe said the document is part of the Government’s modernisation plans and results in a “more patient-centred” health service.

“The Atlas of Variation lets us look at how the local NHS is meeting the clinical needs of their local population,” he said. “We are committed to improving results for patients and our new NHS Outcomes Framework will hold the NHS to account for this. Commissioners will be able to apply contractual penalties if any organisation is failing to deliver improvements for patients.”

The Government is to introduce 60 new goals that NHS hospitals and doctors are to be judged against in a move it hopes will save thousands of lives a year.

Benchmarks such as preventing unnecessary early deaths and improving the quality of life for people with long-term conditions will replace the target system introduced by Labour to assess the success of the NHS.

In an interview with The Daily Telegraph, Health Secretary Andrew Lansley says the benchmarks will “define what the NHS is setting out to achieve”.

The new system will focus on patients’ experience of the NHS – and not the speed of which they were treated – in an attempt to drive performance levels.

The use of comprehensive data on hospital death rates, the performances of GPs and surgeons and surveys from patients to gauge their satisfaction of the standard of care they received and their speed of recovery will all be analysed to assess whether benchmarks have been met. The views of bereaved relations and children for the first time will also be obtained as part of the Government’s plans.

“This is literally saying to patients ‘if you were in hospital, if you were being looked after by your general practitioner was the service and experience you had good or not?’” said Andrew Lansley. “It’s not like some other kinds of medical model where you kind of treat people and they get better. This is different. This is really where you begin to kind of focus on the experience of care.”

“We’ll be undertaking a consistent national survey of the bereaved relatives of people who received end of life care,” Mr Lansley said. “Asking them, after a suitable passage of time, what was their loved one’s experience of care and how well were they looked after towards the end of life.”

If the new standards are to be achieved, the Health Secretary believes that up to 24,000 early deaths a year could be prevented from cancer and other long-term conditions. Mr Lansley also hopes the new measures will increase access to NHS dentists and see fewer people with long-term conditions treated in hospitals. Patients undergoing routine hip and knee operations will no longer be left in pain or unable to walk, the Health Secretary pledged.

Mr Lansley said that his time as Health Secretary will not have been successful if the new benchmarks do not improve the NHS by the next general election.

“We have to clear the decks and be clear this is what we are focusing on,” he said. “People say in three and a half years’ time, in 2015, at the next election, how will we know whether you’ve succeeded or not? The answer is ‘have the outcomes improved? It will be my failure if we haven’t improved them and the NHS should feel that it has not succeeded, that is what we are setting out to do.

“We’ve really got to get into the big picture, which is delivering improvements in the results we achieve for patients right across the board. We know that we can do it.”

The Government will also publish current performance data for the first time for each of the benchmarks in an attempt, Ministers hope, will force up standards.

Shadow Health Secretary Andy Burnham said the new measures would not be received well by those working within the NHS. “Doctors and nurses will roll their eyes in sheer disbelief at this news,” he said.

“The Government that promised to scrap NHS targets now loads 60 new targets on an NHS already under severe pressure. It will add red tape and bureaucracy just as the NHS is struggling to cope with the financial challenge and the biggest reorganisation in its history.”