Wes Streeting said the aim is to cut the number of staff undertaking central work for running the NHS by 50 percent, with many roles returning to government.
Health Secretary Wes Streeting has said that £1 billion is not an unreasonable estimate for the cost of redundancy packages for NHS England staff.
Streeting appeared before the Health and Social Care Select Committee on Tuesday to answer MPs’ questions about the future of the NHS, including the progress of dismantling NHS England after Prime Minister Sir Keir Starmer announced plans to scrap the world’s largest quango and bring its functions back under government control.
When asked about reports that it could cost £1 billion in severance packages to make up to half of central staff redundant, Streeting responded, “I didn’t think that was an unreasonable ballpark figure.”
However, he stressed that the Department of Health and Social Care (DHSC) will not know the precise numbers until the department has “confirmed what the ultimate size and shape of the organisation will be.”
Also present at the committee was Jim Mackey, the transition CEO of NHS England, who added that he and the DHSC have just started conversations with the Treasury about how redundancy costs are managed.
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Ministers expect that savings from the restructure will go to frontline health care services.
Half of Staff to Go
Streeting cautioned to the committee that while the £1 billion figure seems high, “we will more than pay for that in terms of the savings that are achieved year on year.”
He added that he believed the reason that the UK ends up with a “bloated state” is because people fear the cost of change.
“We just can’t afford to do that as a country any longer. I would argue that we should have done this a long time ago,” he said.
Streeting said he’s looking to dramatically cut that figure, saying, “We’ve been very clear we want to reduce the size of the centre by 50 percent.”
“I’m not so dogmatic that if we ended up just below 50 percent or just above 50 percent that I would be feeling like we fail one way or another. But I think that that direction [of travel] is really important,” he added.
2 Years
The health secretary was also clear in expressing his sympathies for those who may lose their jobs and the scale of redundancies to come.
He said: “We don’t take these decisions lightly. I don’t for a moment suggest that because there is waste, inefficiency, and duplication—or that there are too many layers of bureaucracy—that this is somehow a kind of failure on the part of the people who are turning up for work every day and working extremely hard as dedicated public servants.
“This isn’t their failure, but it is a failure of the system they work in.”
A general view of staff on a NHS hospital ward at Ealing Hospital in London, on Jan. 18, 2023. Jeff Moore/PA Wire
The minister also told MPs he estimates it will to take around two years to formally close NHS England, including bringing teams together and reducing headcount.
He said work was beginning in the coming months, but that while there are things that government can do without primary legislation, “ultimately, the process of abolishing NHS England will require primary legislation” which takes time and the efforts of Parliament.
Reducing Waste, Inefficiency, Duplication
The secretary of state for health and social care said that the aim of the restructure was to reduce waste, inefficiency, and duplication, noting that currently, there are effectively two head offices for the NHS: NHS England and the DHSC.
Streeting said, “I make no bones about the fast that one of the objectives of this exercise is to ensure better clarity and decision making from the centre nationally, but it’s also about freeing up hundreds of millions of pounds that can be deployed into frontline services.”
“I think that is welcomed by patients. I think it’s welcomed by lots of frontline staff who agree with that diagnosis of too many layers,” he said.
Streeting also confirmed that during his tenure as secretary of state, he will be committed to reducing the number of quangos—formally termed “arms-length bodies” (ALBs)—attached to his department.
The government said that if an ALB’s existence as an independent entity cannot be justified, it will be merged with other bodies, closed, or brought under direct government control.