§ Mr. Rentonasked the Secretary of State for Social Services what percentage of the National Health Service budget is now spent on administration and management as compared with 10 years ago and what savings may result from the abolition of the area management tier.
§ Dr. VaughanWhile I cannot give strictly comparable figures for the cost of management between 1969 and 1979, my hon. Friend may be interested to know that headquarters administrative costs in 1968–69 were 2.7 per cent. of total costs of the NHS and in 1978–79 were 4.15 per cent. That is an increase from £31 million in 1968–69 to £256 million in 1978–79. Currently the cost of management in the NHS is £300 million a year.
We expect that simplifying the structure of the NHS will lead to a reduction of 10 per cent. in the cost of managing the service, that is, a saving of some £30 million which can be redirected to patients.