DoH data reveals true cost of NHS reforms

DoH data released a day after MPs voted in favour of the Health Bill showed the reforms will not deliver predicted savings and will cost the NHS £600m in redundancy pay.

Dr Helena McKeown: report shows reform plans are 'tremendously risky' (Photograph: JH Lancy)
Dr Helena McKeown: report shows reform plans are 'tremendously risky' (Photograph: JH Lancy)

Thousands of PCT staff made redundant as a result of the NHS reforms will receive an average payout of £56,000, DoH figures show.

A revised Health Bill 'impact assessment' report shows PCTs are expected to pay a total of £634m in redundancy payments to 11,300 staff.

'NHS leadership' staff, which includes DoH employees, will receive payouts worth an average of £127,500.

The report also showed that savings expected to result from the reforms are substantially lower than previously estimated. Long-term annual savings expected from 2014/15 will be £1.5bn per year. Previously this was estimated to be £1.7bn per year.

The DoH data also revealed that the net savings over the transition period are predicted to be around £3.2bn - £600m lower than the previous estimate made in January.

But health secretary Andrew Lansley said the revised impact assessment showed that the cost of modernising the NHS was 'only a fraction' of the savings which will result.

He said: 'We are cutting waste and are still on track to reduce administrative spend by a third. Every penny saved will be reinvested into patient care, delivering significant long-term benefits to patients.'

However, GPC member Dr Helena McKeown said the report highlighted that the reform plans remained 'tremendously risky'.

'A time when we have to save £20bn in efficiency savings was not the right time to undertake an expensive reform with lots spent on redundancy payments,' she said.

'We shouldn't have had such a high-risk strategy at a time when we have to save money.'

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