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NEWS STORY

NAO report reveals cost of NHS reforms

10/07/2013

The full cost of the health reforms and the financial uncertainty facing clinical commissioning groups has been revealed by a report from the National Audit Office.

The report, Managing the Transition to the Reformed Health System, reveals that 170 organisations were closed as part of the reforms and more than 240 new bodies created and that while all the new organisations were ready to start functioning on 1 April 2013, not all were operating as intended. Nine per cent of posts across the system were vacant on 1 April and the new bodies need to assess if the staff they have inherited are affordable and have the right skills.

All 211 clinical commissioning groups were authorised as statutory bodies, but some were not ready to operate independently. Some lack credible financial plans raising concerns that they will not be able to make savings and remain financially sustainable in the coming years, the report says. Many groups also began operating in an atmosphere of financial uncertainty with NHS England still adjusting budgets after 1 April 2013, causing delays in the groups agreeing contracts with healthcare providers.

To 31 March the reforms have cost £1.1 billion, 15 per cent more than expected. Around 10,000 staff have been made redundant as part of the reforms, each receiving an average redundancy payment of £43,095. The Department of Health estimates that 2,200 staff made redundant between May 2010 and September 2012 were subsequently re-employed, but redundancy payments could only be reclaimed only if the individual concerned rejoined the NHS within four weeks of leaving.

Amyas Morse, head of the National Audit Office, 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. Some parts of the system were less ready than others, and each organisation now needs to reach a stable footing. This will be particularly challenging at a time when the NHS is having to make significant efficiency savings.”

Dr Mark Porter, chair of BMA Council said the findings echoed many of the BMA’s concerns. "Introducing radical changes to how the NHS is run and structured during a period of intense financial pressure has been a costly distraction to solving the real challenges facing the health service. To learn that some of the newly created organisations already face financial uncertainty is extremely worrying, particularly as they are still expected to make financial savings in the months, and potentially years, ahead.”
 


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