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NHS reforms have led to £435m in redundancy payouts


The NHS has forked out hundreds of millions of pounds making staff redundant as part of its controversial health reforms, official figures show.

More than 10,000 full-time employees were made redundant as a result of the Health and Social Care Act - which came into force on April 1 this year.

Health officials paid out more than £435m, an average of £43,095 per person, in redundancy payments.

Data from the National Audit Office (NAO) shows that senior managers at strategic health authorities and primary care trusts, which were abolished under the changes, received up to £580,000 in redundancy payments.

There were 44 “very senior managers” made redundant between August 2012 and March 31 2013, the NAO said, with an average pay-off of £277,273. Individual payments ranged from £33,771 to £578,470.

But 2,200 staff made redundant between May 2010 and September 2012 were subsequently re-employed in the NHS, according to the latest NAO report into the health reforms.

The Department of Health (DH) sought to reduce the risk of staff receiving a redundancy payment from one NHS organisation and then being re-employed by another, but it had “limited levers to prevent this happening”, the report states.

Redundancy payments can only be reclaimed if the employee rejoined the NHS within four weeks of leaving.

The NAO report said that “further changes” will be needed before the right number of staff with the right skills are in place across the system, including further redundancies.

It states that getting staff in place was the “biggest challenge” for the new organisations and all of them had sufficient employees to start operations on 1 April.

Until March 31, the reforms have cost £1.1bn to implement, and the DH is “confident” the total costs will not exceed £1.7bn, the report states.

The NAO said the transition, which saw 170 organisations closed and more than 240 new bodies created, was “successfully implemented”, even though some parts of the system were “less ready than others”.

But officials said that “much remains to be done to complete the transition”.

One of the biggest changes was the move from primary care trusts to clinical commissioning groups (CCGs), which will be led by GPs and other clinicians who will take on responsibility for commissioning care.

But the NAO said that some of the CCGs initially lack credible financial plans, adding: “This raises concerns about their ability to make savings and remain financially sustainable in the coming years.”

Amyas Morse, head of the NAO, said: “It is a considerable achievement that the new organisations were ready to start work on time.

“This could not have been accomplished without the commitment and effort of many NHS staff. However, much needs to be done to complete the transition.

“Some parts of the system were less ready than others, and each organisation now needs to reach a stable footing. This will be particularly challenging at a time when the NHS is having to make significant efficiency savings.

“The reformed health system is complex and the Department, NHS England and Public Health England must take a lead in helping to knit together the various components, so that the intended benefits for patients are secured.”

Dr Mark Porter, chair of council at the British Medical Association, said: “Introducing radical changes to how the NHS is run and structured during a period of intense financial pressure has been a costly distraction to solving the real challenges facing the health service.

“To learn that some of the newly created organisations already face financial uncertainty is extremely worrying, particularly as they are still expected to make financial savings in the months, and potentially years, ahead.

“All the evidence is pointing to a worsening financial situation for the NHS and the government needs to urgently rethink its approach. Most of the savings have come from pay freezes and cuts in the tariffs for services but this is neither sustainable or likely to deliver the long-term savings that are needed to protect patient services.”

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Readers' comments (6)

  • tinkerbell

    The reformed health system is complex and the Department, NHS England and Public Health England must take a lead in helping to knit together the various components, so that the intended benefits for patients are secured.”

    knit one, purl one, and end up with a jumper with a back, a front and one arm cos' we ran of of wool cos millions and squillions of pounds have been wasted on the re-disorganisation that could have been spent on patient care and staff recruitment. No forward planning involved just a disgraceful waste of money to make the NHS even more 'complicated' than it was. What could possibly go wrong?

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  • I agree with Tinkerbell - an inexcuseable waste of money and a service that is falling apart due to poor planning.

    Surely there is someone out there who can devise a coherent plan to secure the future of the NHS?

    It is time for the politicians to level with the people of Great Britain and tell us all how it is - unsustainable in its present form......

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  • tinkerbell

    Anonymous | 11-Jul-2013 10:08 am

    does such an honest politician exist? At least we would all know where we stand. I can deal with the truth but not all these lies and dishonesty when we see every day how all services are being depleted and in there place we are given 'gimmicks' like the 6 c's, a badge of honour, the hourly rounding, new multi coloured lanyards, a new biro or whatever etc., etc., and political posturing feigning concern with no action.

    Sick to the back teeth of it all.

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  • tinkerbell

    just listened to Nicholson on the news repeatedly not answering the question when asked' isn't part of the problem YOU?'

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  • tinkerbell

    such astounding hypocrisy, tonight on the news it said that prior to being elected david Cameron campaigned to keep a hospital open, and then once elected closed down their emergency department.

    I must be grinding my teeth too hard, cos one of them snapped in half tonight.

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  • *****

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