The NHS may need to cut its workforce by about 10 per cent — the equivalent of 137,000 staff — to help to meet planned savings of £20 billion, according to a leaked Department of Health report.

A study commissioned from the consultancy firm McKinsey and Company recommends cutting clinical staff posts as well as administrators to meet efficiency savings by 2014, suggesting a knock-on effect to patient care.

The report, seen by the Health Service Journal (HSJ), recommends a range of possible actions, such as a recruitment freeze starting in the next two years, a reduction in medical school places from October and an early retirement programme to encourage older GPs and community nurses to make way for “new blood/talent”.

The report was presented to the Department of Health in March, the HSJ says today. It carries the department’s logo and has been distributed among senior NHS managers.

The study said £2.4 billion could be saved if hospitals with the lowest levels of staff productivity improved to become nearer the average levels. It added that almost 40 per cent of patients in a typical hospital did not need to be there.

Productivity is notoriously difficult to measure in an organisation as large as the NHS, which employs 1.5 million staff, but the biggest causes for patients staying unnecessarily long in hospital were delays in receiving tests or therapies, or a lack of suitable carers or facilities that meant patients could not go home.

The report also said that if four million of the 29 million outpatient appointments each year could be cut, it would save £600 million.

A further £700 million could be saved if procedures with limited clinical benefits — such as tonsillectomies, varicose vein removal and some hysterectomies — were no longer performed.

The analysis also suggests that up to £8.3 billion of hospital estates could be “freed up” or sold to generate income.

Andrew Lansley, the Shadow Health Secretary, said: “Yet again Labour ministers are failing to be straight with the British people.

“Andy Burnham [the Health Secretary] promised to protect the NHS, but now we find out that his department has been drawing up secret plans for swingeing cuts.

“Clearly, we need to get better value for money from the NHS, so we applaud any drive for greater efficiency, but it is extraordinary that Labour plan to take an axe to the hospital budget rather than to the bloated health bureaucracy.

“Only a fifth of job cuts would be within the bureaucracy, meaning the vast majority to go would be frontline NHS staff.

“After years of declining productivity, this report shows that Labour still doesn’t get it.

“Instead of relying on plans drawn up by management consultants for top-down cuts, they should be looking to create incentives through the way hospitals are paid, which would drive up standards and drive down costs.”

Explore Health

• Expert Advice

• Health Features

• Mental Health

• Alternative Medicine

• Child Health

• Health Club