News Analysis - Reid prescribes major cull of NHS quangos

29 Jul 04
Last week, Health Secretary John Reid outlined how he intends to save £500m on NHS bureaucracy by slashing the number of quangos. But the real work has only just begun.

30 July 2004

Last week, Health Secretary John Reid outlined how he intends to save £500m on NHS bureaucracy by slashing the number of quangos. But the real work has only just begun.

Over the coming months, quangocrats will be examining ways to produce the required savings, reduce staff numbers and ensure none of their services falls between the cracks.

Senior managers in the arm's-length bodies have been charged with producing plans by the autumn, which will set out the timetables for reducing their number from 38 to 20 and cutting their 25,000 staff by 25% by 2008.

The review is part of the Department of Health's response to Sir Peter Gershon's efficiency review. In one of the biggest changes, the NHS Counter Fraud and Security Management Service, the NHS Pensions Agency, the Dental Practice Board and the Prescriptions Pricing Authority will be replaced by the NHS Business Services Authority. With its recent successes in fighting fraud, the CFSMS will be seen as the senior partner in this reconfiguration.

The NHS Litigation Authority, the body that indemnifies NHS organisations against clinical and non-clinical claims, will be reconstituted to oversee the proposed NHS redress scheme and manage financial compensation nationally. It will also resolve disputes in primary care when it takes on the functions of the Family Health Services Appeal Authority, which will be abolished.

The National Institute for Clinical Excellence will take on the work of the Health Development Agency to link standards on preventing and treating ill health.

No quango will be exempt from the efficiency drive. The newly reconstituted bodies will be expected to release more than £200m in savings for the front line, for example by sharing back-office services. They will also be expected to release £150m–£200m by devolving some functions.

The review has been cautiously welcomed. NHS Confederation chief executive Gill Morgan says: '[It] has sensible recommendations to rationalise the number of organisations, but we need to ensure that in reducing numbers we do not throw the baby out with the bath water. These organisations have fulfilled important roles and we risk losing valued services and skills with such a large-scale change happening so quickly.'

CFSMS chief executive Jim Gee adds: 'This organisational change will not affect the good progress of counter fraud and security management work in the NHS. The staff of CFSMS will remain focused and absolutely determined to protect the NHS and its resources, people and property.'

The loudest complaints are over the abolition of the Commission for Patient and Public Involvement in Health, which was established in January 2003. Reid has promised stronger, more efficient arrangements for administrative support and advice to the commission's patients' forums. But chief executive Laura McMurtrie is disappointed and calls for formal consultation. 'The CPPIH and Patient and Public Involvement Forums were established after lengthy and in-depth consultation. There was overwhelming support for a strong and independent national body.

The review does not make clear how this will be achieved. We will urgently be seeking clarification.' King's Fund chief executive Niall Dickson says the decision leaves patient and public involvement in disarray. 'The current range of piecemeal policies does not add up,' he says. 'It is bewildering to those who work in the NHS and a complete mystery to the public. [It] will simply add to the confusion.'

However, he welcomes the principle behind the cull. 'Too often, the government's solution to every problem has been to establish an agency, with the result that the NHS has been drowning in an alphabet soup of acronyms. Let us hope this is the start of a more rational approach.'

There is much work to be done and difficult times ahead for quango staff if the planned changes and savings are to be achieved. The detailed plans in the autumn will be the first test of how painful the process will be.


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