Cost of NHS reforms rises by £300m

Health secretary Jeremy Hunt has revealed that the NHS reforms will cost £300m more than originally estimated.

Costs of NHS reform will be up to £1.6bn
Costs of NHS reform will be up to £1.6bn

In a written ministerial statement, Mr Hunt said that the implementation of the Health and Social Care Act in England would cost ‘in the range of’ £1.5bn to £1.6bn. Redundancy costs are expected to be around £630m, he said.

The DH’s original impact assessment, revised last year, said the implementation costs would be in the region of £1.2bn to £1.3bn.

Mr Hunt said: ‘Although higher than the most likely estimate made in the impact assessment (£1.2bn to £1.3bn), the costs remain within the wider possible range published in the coordinating document (£1bn to £1.5bn), after taking account of some costs (estimated at £127m in total) that were excluded from the impact assessment either because they were out of scope (for example, because they related to measures not requiring legislation) or because they were redacted (for example, because they were commercially sensitive).’

Mr Hunt said that the long-term savings from the changes were estimated to be £1.5bn per year, from 2014/15 onwards. Gross savings over the transition period, which began in 2010/11 and is due to end next April, are estimated at £4.5bn.

The health secretary said that the redundancy costs are now £360m lower than the highest estimate in the impact assessment and ‘some £180m lower than the most likely estimate’.

A DH spokesman said: ‘The NHS needs to change so that patients get the care they need, when they need it. These costs represent the one-off investment needed to implement our reforms.

‘We are introducing structures that will make the NHS stronger, so that in the face of an aging population with changing health needs it can provide the very best care patients deserve. This is why we are handing control to local doctors and nurses, who will be able to make decisions and shape their local NHS around what their patients really need.’

BMA chairman Dr Mark Porter said: 'The huge costs of this largely unnecessary reorganisation are particularly galling given that patient services are being rationed.  The NHS has been tasked with saving £20 billion by 2015, and that could go up.  Achieving savings on this scale was always going to be a steep challenge, but it is being made even harder by the fact that time, energy and resources have been taken up by massive structural change.'

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