Thousands of NHS staff redundancies to go ahead after funding agreed

Thousands of NHS staff redundancies will now go ahead after funding for the estimated £1 billion cost was agreed with the Treasury.

The Government has already announced that headcount across both NHS England and the Department of Health will be cut by around 50%, with around 18,000 administrative staff and managers, including on local health boards, set to go.

NHS England, the Department of Health and Social Care, and the Treasury have been locked in discussions over how to pay for the £1 billion one-off bill for redundancies.

NHS England chief executive Sir Jim Mackey told the Health Service Journal (HSJ) last week that talks with the Treasury had been “constructive”, and added: “I’m confident that we’re close to resolving it [and] I would hope that it gets resolved properly before the Budget. We are kind of there or thereabouts.”

It is now understood that the Treasury has not granted additional funding for the departures over and above the NHS’s current cash settlement.

Instead, the NHS will be permitted to overspend its budget this year to pay for redundancies, recouping the costs further down the line.

According to the Department of Health, the reforms will slash “unnecessary bureaucracy” and raise £1 billion a year by the end of the Parliament to improve services for patients.

It said every £1 billion saved in bureaucracy costs is enough to fund an extra 116,000 hip and knee operations.

Chancellor Rachel Reeves is expected to make further announcements regarding the health service in the Budget on November 26.

Addressing the NHS Providers’ annual conference in Manchester on Wednesday, Mr Streeting is expected to say: “The Government is protecting investment in the NHS at the Budget, worth an extra £29 billion to the health service.

“I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely.

“We have already cut waiting lists for the first year in 15 years, recruited 2,500 more GPs, and cut ambulance waits for patients with conditions like heart attacks and strokes.

“Our investment to offer more services at evenings and weekends, arm staff with modern technology, and improving staff retention is working.

“At the same time, cuts to wasteful spending on things like recruitment agencies saw productivity grow by 2.4% in the most recent figures – we are getting better bang for our buck.

“We’re now pushing down on the accelerator and slashing unnecessary bureaucracy, to reinvest the savings in frontline care.

“It won’t happen overnight, but with our investment and modernisation, we will rebuild our NHS so it is there for you when you need it once again.”

NHS England will be brought back into the Department of Health within two years.

Mr Streeting will also give NHS leaders the go ahead for a 50% cut to headcounts in Integrated Care Boards (ICBs), which plan health services for specific regions.

They have been tasked with transforming the NHS into a neighbourhood health service, as set down in the Government’s long-term plans for the NHS.

NHS Providers’ chief executive Daniel Elkeles said: “This is a pragmatic step that means planned redundancies can now go ahead.

“It reflects the flexibility of a three-year settlement, allowing some funding to be brought forward in order to generate future savings to go into frontline care.

“However we must recognise the position of staff affected by these changes – people who have offered commitment and service to the NHS – who face a very uncertain future.”

Matthew Taylor, chief executive of the NHS Confederation, said: “This is a welcome move that provides certainty to NHS leaders who can now go ahead with planned redundancies.

“It has been a difficult period of uncertainty for our members and we know this has placed a strain on staff.

“We’ll await the full details but for now we are pleased to see that this situation has been resolved and that we can proceed with the redundancy programme.

“This will provide clarity for staff and help release savings down the line.”