NHS manager redundancy payouts total £1.6bn since 2010

NHS manager redundancy payouts total £1.6bn since 2010

Latest accounts reveal more than 38,000 ‘exit packages’ agreed since reforms began, with some 4,000 later rehired.

The cost of redundancy payments for NHS managers has hit almost £1.6bn since the coalition came to power and embarked on its sweeping reorganisation, according to the latest Department of Health accounts.

The total includes payouts to some 4,000 “revolving door” managers, who left after May 2010 with large payouts but have since returned either on full-time or part-time contracts.

The data sparked a fresh political row last night as Labour accused the government of contributing to a financial crisis in the NHS by wasting public money on unwanted reforms, while the government insisted it had made the service leaner and more efficient.

The figures released last week showed that in 2013-14 a total of 6,330 “exit packages” were agreed for NHS staff, at a cost of £197m. This took the total since 2010-11, when the government launched its reform plans, to 38,419 packages totalling £1.588bn. Last year some 237 managers received payoffs of between £100,000 and £150,000, 83 of between £150,000 and £200,000, and 40 of over £200,000.

While the figures were down on the past three years and particularly on 2012-13, when the reorganisation was at its height, they highlighted the continuing one-off cost of transformation.

Labour claimed that the government had originally estimated redundancy costs as a result of their changes would be £810m, and that the extra cost explained why so many trusts were in financial difficulty. In Labour’s last year in office, they added, redundancy payments were in the region of £35m.

Referring to David Cameron’s pledge not to introduce any more “top down” reorganisation of the NHS, shadow health secretary Andy Burnham said patients were paying a heavy price for reforms they had not voted for.

The Audit Commission expressed concern on Thursday about the number of trusts being referred to the secretary of state as in financial difficulty.

Burnham said: “Labour has consistently said that Cameron’s reorganisation would cost at least £3bn and this shows we were right. It explains why the NHS is now in such a financial mess. This scandalous waste cannot be justified when older people are being denied essential hip and cataract operations and when cancer patients are waiting longer for treatment.

“Nurses denied a modest pay rise will find it galling to see millions wasted on six-figure payoffs for managers who were then re-hired. It amounts to mismanagement of the NHS on a mammoth scale and a government with its priorities seriously wrong.”

With less than a year to go until the general election, the Conservatives and Liberal Democrats are insisting that by shedding bureaucrats the NHS is becoming more efficient. Department of Health officials said the total cost of redundancy payments directly resulting from the reforms was far lower than originally estimated: just £456m.

Health secretary Jeremy Hunt has said NHS modernisation should cost no more than £1.5bn in total, and save £1.5bn a year from 2014-15 onwards.

A Department of Health spokesperson said: “Our bureaucracy-busting reforms put power in the hands of local doctors and nurses and are saving the NHS over £1bn a year. There are now nearly 7,000 fewer managers and over 16,450 more clinicians than in 2010.”

Strategic health authorities and primary care trusts were abolished last April under the Health and Social Care Act, with GPs given more responsibility for commissioning services. But the changes ushered in huge staff movements from 2011 onwards, with many managers being laid off only to find their services still required.

In March health minister Dan Poulter revealed that 3,950 NHS staff were made redundant between May 2010 and November 2013 and later re-hired, 2,570 of them on a permanent basis and 1,380 on fixed contracts.

Last week’s Department of Health accounts show that the average cost of redundancy packages since 2010-11 has been £40,646. Since 2010-11, there have been a total of 370 payouts of over £200,000, 596 of between £150,000 and £200,000 and 1,693 of between £100,000 and £150,000.

  • The Observer, 

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