A massive new reorganisation of the NHS has been under way since the end of last year: it took a further lurch forward and hit news headlines on March 13 with Sir Keir Starmer’s surprise announcement that NHS England is to be abolished.
Throughout the process the hand of Health Secretary Streeting and his aides has been clearly visible, orchestrating the announcements and the changes, as structures set up through legislation as recently as 2022 are drastically changed. (See the Timeline below)
Few campaigners will shed many tears at the dismantling of NHSE. Its role from the beginning was as the national commissioning board overseeing the competitive market for health care established by Andrew Lansley’s disastrous mega-‘reform’ from 2013.
But nor is there any obvious enthusiasm to go back to the decade of New Labour’s market-style reforms, primary care trusts, strategic health authorities, PFI, privatisation and “world class commissioning” that came before it, although that seems to be the model that Streeting and Starmer are hoping to recreate.
Despite being notionally ‘independent’ and ‘at arms length’ from ministers, NHSE has for all 12 years obediently followed up every government push for greater use of private sector providers.
In 2016-17 it was NHSE that attempted to carve England’s NHS into 44 “footprints” and force through rapid reconfiguration through “Strategic Transformation Programmes,” which have in almost every case proved impractical as well as unpopular.
In 2019 NHSE faced down furious complaints from all parties and health professionals in the area to drive through a privatised imaging contract in Oxfordshire.
NHSE has also consistently refrained from criticising the year after year of under-funding, even as they struggled to force trusts and ICBs to stick within their limited budgets as demand for services has increased.
Last autumn, with A&E demand running at record levels and treatment increasingly taking place in Emergency Department cubicles or with patients lined up on trolleys along hospital corridors, NHS England responded by issuing guidelines on how best to deliver “safe and good quality care in temporary escalation spaces” (aka corridors). This was angrily dismissed by the Royal College of Emergency Medicine (RCEM) as “normalisation of the dangerous” and promoting “corridor care”.
In January NHSE again complied with Starmer and Streeting’s eagerness to embrace private sector providers by signing an agreement with the private sector, committing to long term contracts to treat elective patients – in return for the private sector increasing investment … to expand its own facilities.
The agreement even committed to include the private sector in local NHS planning and decision-making – something Tory ministers had been willing to rule out.
So the scrapping of NHSE is not part of a privatisation agenda: it can only be establishing much closer direct control by Streeting, the Department of Health and Social Care bureaucrats – and behind them the Treasury.
Unlike NHS England, which publishes its board papers and streams its meetings online, the DHSC Board functions behind closed doors and is not subject to external scrutiny. Nor does it have the regional structure established by NHSE, so once it’s gone every decision taken at local level will have to be checked out by Whitehall civil servants.
One reason for the scale of the NHSE workforce has been that it has merged with and absorbed previously separate bodies that will have to be in some way incorporated into the Department. These are:
NHS Improvement (itself a merger of the foundation trust regulator Monitor, the NHS Trust Development Authority and Patient Safety), which merged in July 2022;
NHS Digital, which merged in January 2023;
and Health Education England merged in April 2023, which was the body overseeing the training of health professionals.
It’s likely that each of these areas of work will require additional staff at the DHSC: in some cases, they may well wind up re-recruiting the same people!
Of course, Starmer has disguised the abolition of NHSE as part of a broader mission to slash bureaucracy, establish “democratic control” in the NHS, strip away a whole layer of redundant management, and put politicians in charge.
However, the end result seems certain to be an increasingly brutal top-down, centralised imposition of what threatens to be an unprecedented round of spending cuts in an effort to stem increasing deficits.
Far from opening up accountability, the unpopularity of the measures will drive even more trusts and Integrated Care Boards into taking their more controversial decisions in secret session, and thus inevitably further limit the already minimal level of NHS accountability to local communities.
The tight limits on running costs seem also designed to force the mergers of smaller ICBs (especially in the Midlands and in the South West) as well as NHS and foundation trusts: in each case the result will again be less transparency and even less local accountability, plus in the case of trusts the danger of reduced local access after mergers as “duplicated” services are “centralised”.
The accelerating purge of NHS England leadership (see Timeline) has run alongside increasingly threatening statements on the need to end a “culture of overspending” by trusts and Integrated Care Boards (ICBs), claims that NHS productivity has fallen compared with pre-pandemic, and calls for cuts in management costs.
NHS England has fuelled this increasing pressure by leaking the results of initial financial plans submitted to it by ICBs, and flagged up the potential total deficit of £6.6 billion in 2025/26 (even though this is only slightly higher than the potential £6 billion gap for 2024/25 identified at the same stage last year.) Then there were warnings that this gap was leading to “horrible” conversations about potential cuts in patient services and an “unpalatable” list of service reductions.
However while last year’s cash shortfall led to ICBs planning a total of £8 billion in “cost savings,” few concrete details have emerged on how these savings have been sought at local level. That seems likely to change now, as the new regime cracks down much harder.
The pressure for drastic action to put the NHS back into balance was further intensified by the government deciding to massively increase defence spending, but without making any corresponding tax increases – leading to hugely controversial cuts in welfare and a de facto freeze on other public service spending.
The pressure reached a peak in the run-up to the national meeting of ICB leaders that took place on the same day as Starmer’s announcement, March 13.
The Health Service Journal had warned on March 10 that desperate measures were being considered by NHS trust and commissioner bosses to cut back on spending after 15 years of pressure to generate “cost savings” each year.
It reported local NHS leaders saying that they could be forced to consider measures such as:
closing recently-opened cancer testing centres;
reducing the size of ‘virtual wards’;
cutting funding for voluntary and charitable ‘third sector’ providers (despite the damage it would obviously do to them);
cutting out-of-hours “waiting list initiative” schemes and cancelling plans for “elective hubs”;
cutting corporate and non-clinical staff numbers,
and in some areas also cutting clinical staff;
some leaders were also looking at additional contentious measures such as watering down doctors’ terms and conditions.
On March 10 Wes Streeting announced NHS England would have to go much further – and halve its already reduced 13,000 workforce.
Two days later interim NHSE CEO Sir Jim Mackey told ICB chiefs by phone that they have just nine months to cut their running costs by 50%, hard on the heels of a 30% reduction imposed in 2023. Mackey also said trusts, too, would be required to cut their management costs. The only bright spot for ICB senior and admin staff contemplating a gloomy future is that the Treasury has apparently agreed to fund redundancies, in what could be a costly process.
With morale inevitably on the floor, it would be a huge surprise if many higher paid leaders did not opt now for a bumper payout rather than struggle on in post to abolition.
The whole process culminated on March 13. While Starmer in Durham announced NHS England was to be abolished and its functions absorbed by the DHSC, a large gathering of local health leaders in London heard interim CEO of NHS England Sir Jim Mackey outline the dire financial situation and the kind of harsh measures that will be required in many areas to address looming deficits.
According to the HSJ report Mackey insisted the recent approach to financial planning was “no longer acceptable.” The whole NHS in England needed a financial “reset.”
The reset of course includes the 50% cuts in ICB management budgets and telling trusts to cut their “corporate services” budgets (like HR, finance, and communications) back to pre-pandemic levels.
But the onslaught goes further, with Mackey reportedly calling for a new two-tier workforce, in which all trusts should consider transferring non-clinical support staff to subsidiaries (subcos) in order to reduce costs by avoiding VAT. This would enable the employment of new staff on inferior, non-NHS pay, terms and conditions.
However it’s not clear whether the Treasury has been informed of the extent to which NHS “cost savings” could potentially rely on tax-dodging, or what their reaction might be.
Mackey also announced plans for an NHS-wide voluntary redundancy scheme, aimed at non-clinical staff. The HSJ explains NHSE fears that “clinical staff redundancies are unwise, as they are likely to only be reemployed”.
Moreover it’s clear that clinical jobs are far from immune from the coming pressure to save cash regardless of knock-on cost or consequences: Mackey told the meeting that he and NHS England would support trusts that decide to cut clinical staffing levels, and would not insist they pay any attention to concerns raised by regulators or by Care Quality Commission reviews.
What is beyond doubt is that none of this reorganisation at the top-most levels of the NHS will deliver any instant results. The whole process of change is most unlikely to deliver the promised levels of savings.
As Roy Lilley has warned, if it’s anything like previous similar occasions, up to one in five of the best performing senior staff will “jump ship and get a better job elsewhere,” while a host of other factors mean the staff left behind during the transition will be less motivated, less productive and more likely to take time off sick or seek ways to protect themselves by actively impeding the merger.
It’s unlikely that in the meantime that even one extra patient will be treated off the waiting list or admitted more quickly from an ambulance as a result of these changes.
NHS England was not the vehicle for wholesale privatisation that some campaigners feared: but neither has it been a reliable defender of the NHS against austerity since 2013. And however badly this situation has been handled, the impact of its loss, and with it no doubt some valuable knowledge, expertise and experience, is likely to be far exceeded by the impact of the cutbacks that are poised to hit front line services and patient care as ministers and their hit men take the helm with a mission to inflict unprecedented cuts in spending.
TIMELINE
October 2024: NHS England chair Richard Meddings announces he would be stepping down in March, two years before his 4-year term is up. Almost immediately Dr Penny Dash, the long-time senior McKinsey partner served as director of strategy at the Department of Health and Social Care from 2000-01, is seen as Streeting’s choice and front runner to take Meddings’ place (formally announced on February 14.)
November 2024: a reshuffle of non-executive members of the Department of Health and Social Care Board installed former New Labour health secretary (and millionaire advocate of and consultant to the private sector) Alan Milburn as “lead non-executive”. Together Dash and Milburn will now co-chair a joint NHSE/DHSC ‘change programme board’ that will now force through the shotgun marriage.
February 25: NHS England chief executive Amanda Pritchard who had been skewered by a highly critical report from the Commons Public Accounts Committee at the end of January, announced on February 25 she would be standing down, and handing over to Sir Jim Mackey, a former chief executive of NHS Improvement and current boss of Newcastle Hospitals.
End of February: of NHSE leaders, made to feel unwelcome, are offered the modern equivalent of a bottle of whisky and a revolver. Chief finance officer (and deputy CEO) Julian Kelly, chief operating officer Dame Emily Lawson, chief delivery officer Steve Russell, and medical director Sir Steve Powis all announce their impending exit.
March 6: Mackey and Ms Pritchard swiftly issued a summons for all chief executives of Integrated Care Boards (ICBs) to attend a meeting in London on March 13 to discuss immediate measures to address the £6.6 billion combined deficit.
March 10: To hurry other NHSE leaders out of the door (such as former NHS Providers CEO Chris Hopson, who jumped ship to accept a newly-created vacuous role of “chief strategy officer” for NHSE in 2022, but has scarcely been heard of since) Streeting calls for a halving of the combined NHSE and DHSC workforce.
March 12: Mackey phones all 42 ICB leaders to tell them they too must cut their management costs by 50%, although Treasury funding will be available to cover costs of voluntary redundancies.
March 13: Starmer announces abolition of NHSE, Mackey outlines plans for draconian cuts and a 2-tier workforce.
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