19 January 2011
Ministers have released details of how they intend to strip £1.7bn a year out of NHS administration costs, and confirmed that councils are to play a key role overseeing local health provision.
Publishing his Health and Social Care Bill today, Health Secretary Andrew Lansley said the reforms, which include placing the £80bn NHS commissioning budget in the hands of GP consortiums, would decentralise power in the service.
Lansley said that the reforms would move power out of Whitehall, and make the meeting between patients and doctors the ‘new headquarters of the NHS’.
An impact assessment published alongside the bill predicts that the £5bn spend on administration can be cut by £1.7bn by 2014/15.
To achieve that, minimum staff cuts of 30% will be required from primary care trusts and strategic health authorities, both of which will be scrapped under the new legislation. The Department of Health will also have to make a minimum of 30% staff cuts.
The remaining staff will be transferred to GP commissioning consortiums, or to the new NHS Commissioning Board.
If 40% of NHS managers lose their jobs, a total of 24,500 posts will be lost, at a cost of £1bn in redundancy settlements.
A further £377m will be spent on ‘non-redundancy transition costs’ associated with the restructure.
The Health Protection Agency will be abolished, and a new central body, Public Health England, will oversee national issues such as disease control.
Upper-tier councils will be required to lead locally on public health, to employ directors of public health and to form a ‘health and wellbeing board’ involving the most important social care, NHS and public health figures in their areas. The boards will set a local health strategy and, ministers hope, ‘increase local democratic legitimacy of NHS commissioning decisions’.
Lansley said the reforms would ‘integrate health and social care as never before’.
Another new body, HealthWatch, will be set up to give patients a stronger voice. The organisation will have a central body and local branches, which councils will be duty-bound to work with to support patients with complaints, or those who need help to make choices about health services.
David Rogers, chair of the Local Government Association’s community wellbeing board, said: ‘It is uncertain whether funding will be sufficient and we seek urgent clarification.
‘It appears councils could receive less than the new central body Public Health England, but have much more responsibility.
‘We will thoroughly scrutinise this bill to ensure it mirrors the government’s stated intention of freeing up councils and communities to decide how best to improve health and wellbeing locally, without needless interference from the centre.’
He added that councils were concerned at the speed of the planned changes, and that the new-look NHS ‘may not be truly ready’ by 2013, when many of the reforms are due to come on line.
Jennifer Dixon, director of the Nuffield Trust, said it was ‘logical’ for ministers to wish to give more power to clinicians, but, ‘this approach carries significant risks in today’s financial climate and needs to be managed very carefully’.
She added: ‘[GP consortiums] will take several years to develop properly, in particular in relation to being able to make a significant impact on hospital services.
‘Management and IT will be vital. There are clear risks of introducing GP commissioning in England when the Government has placed such a strong emphasis on reducing management costs.’
