ICBs have been asked to cut their workforce by 50%, which equates to around 12,500 staff across the health system, according to chief financial officer at NHS England, Julian Kelly.
Speaking to the House of Commons Public Accounts Committee (PAC) this morning, Mr Kelly said both NHS England and ICBs had been given the target. However, Prime Minister Sir Keir Starmer has since said NHS England will be brought back into the Department of Health and Social Care (DHSC) to ‘end duplication’.
Speaking before the announcement that NHS England was to be abolished, Mr Kelly said: ‘Sir James Mackey in coming in as the incoming chief executive, has set the target to reduce both the size of NHS England by 50% and has asked ICB to look at how they can reduce their size by 50%.’
He confirmed this would ‘require a redundancy scheme to achieve that scale of change’.
When asked about what difference this would mean in monetary terms, Mr Kelly said: ‘In really simple numbers, we had already set a budget for around 15,000 people in NHS England, if you take 50% of that number out you would be saving on an annualized basis, when completely delivered around £400 million pounds.
‘And in ICBs, they currently employ around 25,000 people. If you reduce their staff by around 50% you would be achieving around £700-750 million pounds of savings on an annualized basis, once fully delivered.’
He clarified that this number is administrators that are not providing frontline services.
When asked about what it would mean for already efficient ICBs, Mr Kelly said that detail would be in the 10-year plan.
He said: ‘Somebody’s going to have to be working out exactly what is the relationship between, not just the Department and NHS England, but NHS England and ICBs, and what are the expectations on providers as well as ICBs as and I think that detail will become clear as the Secretary of State the Department and the NHS team finalise the 10 year plan.’
He added that he was only told the decision yesterday.
NHS Confederation chief executive Matthew Taylor said: ‘We understand the precarious state of the public finances and our members are prepared to do what is required. The short term task is to stabilise NHS finances and do everything possible to reduce the NHS’ deficit, and our members will work with the government and NHS England to do that. But the reality is that these cuts will require major changes and they will inevitably make the task of delivering long term transformation of the NHS much harder.
‘The 10 Year Health Plan will set out the government’s future ambitions for the NHS, and the danger is that we go too far and leave little to no capacity to deliver this long term transformation. Where possible we must find ways to support the long term shifts that the government itself, alongside our members, are committed to making.’
On the move to roll NHS England into the DHSC, health secretary Wes Streeting said: ‘When money is so tight, we can’t justify such a complex bureaucracy with two organisations doing the same jobs. We need more doers, and fewer checkers, which is why I’m devolving resources and responsibilities to the NHS frontline.’
He added: ‘This is the final nail in the coffin of the disastrous 2012 reorganisation, which led to the longest waiting times, lowest patient satisfaction, and most expensive NHS in history.’
Sir James Mackey, who will take over as transition CEO of NHS England, said: ‘We know that while unsettling for our staff, today’s announcement will bring welcome clarity as we focus on tackling the significant challenges ahead and delivering on the government’s priorities for patients.
‘But we now need to bring NHS England and DHSC together so we can deliver the biggest bang for our buck for patients, as we look to implement the three big shifts – analogue to digital, sickness to prevention, and hospital to community – and build an NHS fit for the future.’
NHS England was originally set up in 2012 as part of former Conservative health secretary Andrew Lansley’s reforms which he said at the time aimed to ‘take the politics and politicians out of day-to-day management of the NHS’.
Known then as the NHS Commissioning Board, it was intended to be an independent body with executive powers and responsibilities.
The DHSC said that work would begin ‘immediately’ to put NHS England’s functions within the department.
It comes after NHS England said it was considering a ‘fundamental reset’ of the financial regime and accountability to ‘get a grip’ on the situation.
ICBs have been under pressure to cut their running costs by 30% by 2025/26, which was announced just before the start of the 2023/24 financial year.
In July last year, ICB leaders delivered a damning verdict into the state of their finances, with 15 out of 19 ICB chief financial officers saying their financial position had deteriorated in 2023/24.
The NAO NHS financial management and sustainability report 2024 estimated there was £1.4bn aggregated deficit in 2023/24 across the 42 integrated care systems (ICSs), with three ICBs in NHS England’s Recovery Support Programme alongside 21 trusts.
An exclusive Healthcare Leader investigation last year found that ICBs had saved £25m through redundancy since they were set up in July 2022.
