Half-way through 2011-12, the first year of its QIPP (Quality, Innovation, Productivity and Prevention) programme, the NHS in England had released £2.5 billion in QIPP savings - around 42% of the forecast annual total, Service deputy chief executive David Florey has reported.

The QIPP programme requires the NHS to deliver efficiency savings of up to £20 billion by 2014-15. Mr Florey's report, covering the second quarter (Q2, July-September) of FY 2011-12, sees "good progress" within the NHS in starting to make the required savings and system transformation, but emphasises that the Service must maintain its focus, delivering further savings whilst driving up quality, to achieve the additional £3.4 billion savings which it needs to make by March 2012.

In particular, he says, "the winter period presents an annual challenge and this will continue to be the case this year. It is vital that the NHS plans and prepares for this to ensure that the positive momentum built up in the first two quarters is maintained."

The report also shows that Q2 saw greater involvement from emerging clinical commissioning groups (CCGs) in the ownership and delivery of QIPP in their local areas in collaboration with existing Primary Care Trust (PCT) clusters. "We have noted a reduction in GP written referrals into the acute sector, which is a positive indication of active GP engagement with QIPP and demonstrates a focus on referral practices to begin to shape service delivery for the future," says Mr Florey.

In addition, a survey at the end of Q1 (April-June) showed that emergency readmission rates within 30-day rules had been applied effectively, and that £92.4 million had been reinvested in services to promote more effective discharge arrangements.

Overall elective activity continued to increase during Q2, albeit at a lower rate than in recent years, as trusts worked to clear their waiting-list backlogs. Despite this increased activity and other pressure on the acute sector, the forecast level of savings anticipated for 2011-12 remains in line with expectations made at Q1, at £5.9 billion.

The report also shows that the NHS continued to perform strongly against the requirements of its Operating Framework for 2011-12 during the period. Progress was made against the key delivery milestones for each region and there was a continuing fall in the level of non-elective admissions to acute services, which "would indicate that the NHS is performing in line with our expectation that patients with long-term conditions are better supported by avoiding the need for emergency admissions," says Mr Florey.

Despite the challenges of QIPP, the NHS also maintained or improved standards of safety and quality. Access to services continued to be maintained, with the NHS delivering above its constitutional commitment to treatment within 18 weeks of referral for 90% of admitted patients and 95% of non-admitted patients, and key cancer standards were achieved across all eight performance measures.

The NHS continued to forecast a healthy aggregate surplus at Q2, with strategic Health Authorities (SHAs) and PCTs anticipating a combined annual surplus of £1.19 billion, equal to 1.2% of total NHS revenues - compared to the £1.16 billion forecast at Q1, the report shows.