28 May 2004
The advice of the health care industry is never unpick your stitches. Shame Health Secretary John Reid didn't listen.
Last week he announced that half of health's arm's-length bodies, which the government has spent the past few years strenuously creating, would cease to exist by 2007/08.
These 42 bodies are surely the latest victims of Sir Peter Gershon's yet-to-be-published review of government efficiency. Reid's own internal review, getting its retaliation in first, has found that there are far too many overlapping and duplicated functions within this £2.5bn-a-year industry.
In a Commons' statement on May 20, he said that there were 'unnecessary regulatory and policy activities', which once abolished would save £500m by 2007/08 and cut the 22,000 staff by a quarter. This would be in addition to the 1,400 civil service posts already being axed as the Department of Health transfers more functions to local level.
'If left unchanged, the arm's-length bodies would employ about ten times the number of staff of the Department of Health at the end of its restructuring programme,' Reid said.
The irony of his announcement, the details of which will probably be announced in late summer, has not been lost on those in the field. The majority of the 42 bodies now facing the axe or a merger were created as part and parcel of Labour's regulation and patient consultation industry.
Several, including the Commission for Patient and Public Involvement in Health (CPPIH) and the Council for the Regulation of Healthcare Professionals (CRHP), have only just celebrated their first birthdays and are unlikely to reach many more in their present form.
It is expected that Reid will attempt to group the bodies together and then work out strategic mergers or abolition.
The regulators, such as the National Institute for Clinical Excellence and the CRHP, will be scrutinised, as will service providers, such as the National Blood Authority, and 'back-office' bodies, such as the NHS Logistics Authority.
Nigel Edwards, director of policy at the NHS Confederation, predicts that Nice and the Health Protection Agency will survive the review and retain their current form. Consultation bodies such as the CPPIH are more likely to be abolished, with doubts over the impact of the year-old agency. Back-office agencies such as logistics could be transferred or outsourced to the private sector.
While Edwards concedes that the review is worthwhile, he says Reid's announcement leaves a lot of questions unanswered. 'The government has decided the number they are going to cut and then are working backwards. This leaves two questions open: if they don't know the future configuration of the agencies, how can they estimate the savings? And will these savings be real or will we just be moving money around?'
The confederation points out that even if agencies such as the NHS Purchasing and Supplies Agency are abolished, the NHS will still need to buy supplies, and costs will not be reduced, merely transferred. Edwards also doubts how cutting jobs equivalent to the staff of a large hospital will lead to savings of £500m.
'What is it that we can stop doing and do without? It is implausible that just cutting 25% of posts will find these savings. This works out at savings of £100,000 per post and there are not enough employed at this level to make these savings.'
Unison is equally sceptical. Karen Jennings, national secretary for health, said the list of agencies up for review appeared 'arbitrary'. She said there were serious concerns over the future of agencies such as the National Patients Safety Agency, which was essential to monitor devolved standards of care.
As Edwards and Jennings point out, Reid's announcement smacks of politics and Labour's efforts to get ahead in the efficiency war. 'Even the Labour government is using bureaucrats in a destructive way. We need administrators and we need leaders to free up clinical staff,' Jennings said.
As the battleground between Labour and the Conservatives intensifies over the next few months, cuts such as these are just a taste of things to come.