NHS reforms to cost ‘no more than £1.7bn’

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nhs200NHS reforms are reported to have cost £1.1bn to 31 March 2013 – 15 per cent more than expected – and the Department of Health is “confident” that total costs won’t be more than £1.7bn. Redundancies have cost £435m but the overall costs are outweighed by the reforms’ savings in administration costs, according to a National Audit Office (NAO) report.

Around 10,000 staff were made redundant as part of the reforms, the report said, and the cost of redundancies accounted for 40 per cent of costs to the end of March 2013, an average of £43,095 a person. The department estimated that 2,200 staff made redundant between May 2010 and September 2012 were subsequently re-employed (redundancy payments can be reclaimed only if a person rejoins the NHS within four weeks of leaving).

The NAO said that the transition to the reformed health system was successfully implemented and the new organisations were ready to start functioning on 1 April 2013, although not all were operating as intended. Some parts of the system were less ready than others, and “much remains to be done” to complete the transition.

Getting staff in place was the biggest challenge and nine per cent of posts across the system are yet to be filled. New NHS bodies will have to assess if the staff they have inherited are affordable and if they have the right skills.

NAO head Amyas Morse said: “It is a considerable achievement that the new organisations were ready to start work on time. This could not have been accomplished without the commitment and effort of many NHS staff. However, much needs to be done to complete the transition… and each organisation now needs to reach a stable footing.”

He added: “This will be particularly challenging at a time when the NHS is having to make significant efficiency savings. The reformed health system is complex and the department, NHS England and Public Health England must take a lead in helping to knit together the various components, so that the intended benefits for patients are secured.”

Labour insisted that the NAO report lifted the lid on the government’s “shambolic” re-organisation of the NHS. Ministers took £3bn away from patient care and wasted part of it on redundancy pays-off, leaving thousands of jobs unfilled, said shadow health minister Andrew Gwynne.

“Since David Cameron entered Downing Street over 4,000 nursing posts have been axed and one in 10 hospitals are now short-staffed,” he said. “I don’t know how the Prime Minister can justify handing out huge redundancy pay-offs to managers and P45s to nurses. David Cameron’s boasts about cutting NHS bureaucracy have come to nothing too – instead, he’s been caught adding to it.”

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