The Treasury has confirmed it will ‘bring forward’ £860m of the Department of Health and Social Care’s (DHSC) funding in order to cover the cost of cuts to NHS England and ICBs.
In the Budget, released yesterday, the Treasury said it was taking steps to improve the productivity and efficiency of the NHS, including abolishing NHS England and ‘significantly reducing the headcount and running costs of ICBs’.
It added that this would be ‘supported’ by ‘bringing forward £860 million of the Department of Health and Social Care’s SR25 [Spending Review 2025] settlement to cover the upfront costs of abolishing NHS England’.
It said: ‘By reducing unnecessary bureaucracy and duplication, the government will unlock savings of £1 billion per year by the end of the Parliament, equivalent to the cost of over 115,000 extra hip and knee operations.’
The Treasury confirmed to Healthcare Leader that this £860m would also be used to cover the cost of ICB cuts alongside the cost of abolishing NHS England.
Earlier this month it was revealed that the cost of redundancies would be funded through the existing NHS settlement.
However, The King’s Fund said the ‘full cost of the government’s restructure of the NHS is still unknown’.
‘Redundancy payments may be affordable this year because of a new agreement with HM Treasury to bring forward planned future spending, but the opportunity costs of restructuring the NHS while embarking on the most significant set of NHS reforms in a decade will be considerable. It also risks distracting senior management at a time when there should be a laser focus on improving performance,’ it added.
Nuffield Trust Senior Policy Analyst Sally Gainsbury added that it was a ‘small boost’ to pay for redundancies’, but that it was ‘one of the tougher periods for funding in the NHS’s history’.
It was announced in March that NHS England was to be abolished, with functions brought back into the DHSC. Over 200 NHS organisations are also set to be scrapped under the 10 year plan.
Meanwhile ICBs were told to cut costs by 50% in March, with redundancies estimated to cost around £1bn in total.
But the lack of clear plan for NHS England’s abolition has been criticised by MPs. Earlier this month, MPs said announcing major reforms to the NHS without plans or funding was ‘poor practice’.
