Labour warns NHS reform will cost millions more than previous estimate

The NHS re-organisation will cost millions of pounds more than previously estimated, Labour has warned.

Mr Burnham: ‘It is scandalous that the government is spending £3.5bn on an unnecessary reorganisation when the NHS is facing the biggest financial challenge in its history.'
Mr Burnham: ‘It is scandalous that the government is spending £3.5bn on an unnecessary reorganisation when the NHS is facing the biggest financial challenge in its history.'

Labour said the Operating Framework for 2012/13 showed that the reorganisation will now cost around £3.5bn as it asks PCTs to hold back 2% of their recurrent funding. This money would be used to cover the costs of the reorganisation, the DoH has said.

The Labour party calculates that this equates to £3.44bn across all PCTs, taking the cost of the NHS reorganisation above the previous £2 to 3bn estimate ‘for the first time’.

Labour’s shadow health secretary Andy Burnham said spending nearly £3.5bn on the reorganisation is ‘totally unjustifiable’ and called on the government to scrap the Health Bill.

He said: ‘It is scandalous that the government is spending £3.5bn on an unnecessary reorganisation when the NHS is facing the biggest financial challenge in its history.

‘If ever a reason was needed to stop this reorganisation then this is surely it. Right now every single penny should be focused on maintaining standards of care. This is a reorganisation that has no democratic mandate and was specifically ruled out by the Coalition Agreement.’

But a DoH spokeswoman said suggesting the reorganisation would cost £3.5bn is a 'large overestimate'.

She said: 'We anticipate costs of £1.2 to 1.3bn over the lifetime of parliament, which will be vastly outweighed by the savings. Over this Parliament, modernisation will save £3.2bn. We will save £1.5bn each year from 2014/15 onwards.'

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