Watchdog reveals £1.1bn cost of NHS reforms

NHS reforms implemented by the coalition government had cost £1.1bn by the end of March 2013, a National Audit Office (NAO) report reveals.

Funding: NHS reforms cost £1.1bn to March 2013

More than 10,000 NHS staff were made redundant as part of the changes, at a cost of more than £430m.

Although the report says the reforms were ‘a success’ in that new NHS organisations were ready to take over from 1 April 2013, it makes clear that many did so with major gaps in staffing and doubts over funding.

Huge sums appear to have been wasted on redundancies with almost a quarter – 2,200 – of staff made redundant subsequently re-employed by the NHS.

Average redundancy payouts of £43,095 per person could not be reclaimed unless staff were re-hired within four weeks.

The RCGP said it was 'dismayed' at the revelations. RCGP chairwoman Professor Clare Gerada said: 'This is a flagrant waste of money at a time when  the NHS - in particular general practice - is buckling under the pressure of ever-increasing workload and ever-decreasing resources.'

The number of NHS organisations cut under the reforms was 170, outweighed by the 240 created, the report says.

The DH estimates lower administrative costs in new NHS organisations had saved more than £2bn by the end of March.

But the NAO suggests this figure may overestimate the true savings by hundreds of millions of pounds.

The NAO report adds that the DH has pledged that the cost of its reforms will not exceed £1.7bn. But the DH ‘does not have robust up-to-date data on the costs that are expected to be incurred in 2013/14 and beyond’, the NAO reports.

The coalition’s NHS reforms overall were ‘a success’ in that new organisations were ready to take on responsibility for services from April, the NAO says.

But it warns that organisations’ readiness to take responsibility for services was hugely variable. Some went live with more than 10% of posts vacant. Many organisations were left in doubt about their budgets, with some still being set by NHS England beyond April, the report says. In many cases rapid changes to organisations meant key staff filling dual roles.

At Public Health England, immunisation and screening services were the ‘front-line area that caused most concern’.

The report says: ‘These posts were regarded as essential and a failure to recruit staff quickly was highlighted as a serious risk in summer 2012. However, a third of these posts remained vacant in early April 2013 (including 10% of clinical consultant-level posts).’

Dr Gerada said savings generated by the reforms were not significant enough to justify them, and warned that the changes were 'a diversion away from providing the best possible care for patients'.

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