Plans to abolish NHS England ‘floundering’ amid lack of Government direction, staff say

Plans to abolish NHS England as part of a war on waste are ‘floundering’ amid a lack of Government direction, health leaders warn.

Sir Keir Starmer announced in March that he would shutdown the ‘world’s largest quango’ as it duplicates work done by the Department of Health and Social Care.

The closure was expected to lead to the loss of almost 10,000 jobs and save hundreds of millions of pounds a year in admin costs that could be spent on frontline care.

But the two-year process is already grinding to a halt amid a row over who will cover the ‘eye-watering’ £1 billion cost of redundancy payments and a lack of parliamentary time to pass the legislation required to axe the organisation.

The Treasury is understood to be resisting requests for extra money to cover the bill, while NHS officials say they cannot afford it from existing budgets.

Unions today described the original timeline as ‘wishful thinking’ as they accused ministers of ‘dragging out’ the process and distracting staff from the important job of tackling waiting lists.

Some NHS England functions that are due to be transferred to DHSC even risk ‘collapse’ as fed-up staff abandon ship for more stable jobs elsewhere, they added.

Sir Jim Mackey, chief executive of NHS England, told staff last week that there is no longer a ‘rush’ to transfer staff to new roles at the DHSC.

Speaking at an internal staff briefing, he said the process of merging NHSE duties with DHSC – and cutting both their central staffing in half – would be ‘more of a gradual, managed process’ than signalled in the spring.

In comments first reported by the Health Service Journal, Sir Jim said: ‘The transformation process won’t be that big, dramatic overnight thing that we thought was going to be the case.

‘We’re still heading towards a similar sort of objective, around the scale of the reduction and joint working with DHSC, but it’s going to be more of a gradual, managed process now over the next couple of years.

‘The downside is, it’ll take a bit longer. The upside is – and especially if we can resolve the [voluntary redundancy] situation – we work through this in a more thoughtful, organised and controlled way over the next couple of years.’

He added: ‘The thing that’s changed is… there’s no rush to transfer employment.’

Addressing the reluctance of The Treasury to grant additional funding for the restructure, Sir Jim said the alternative would probably involve ‘a more managed process over a period of time where we use some more of our own internal resources for the business case’.

There is also doubt about whether legislation can be drafted and passed through Parliament in time to formally abolish NHSE ‘within the next two years’, the timetable set in July’s 10-Year Health Plan.

Jon Restell, chief executive of the Managers in Partnership union, which represents some NHS England staff, told the Daily Mail: ‘The assessment of our members is that the government is floundering with its system changes.

‘It’s now clear that the fast timetable for cutting staff, announced in March, was just wishful thinking.

‘People are not clear about what the government is trying to do and what the end point looks like – this is a terrible way to start big change in any organisation.

‘Policymakers seem oblivious to how their decisions affect working people.

‘The uncertainty and confusion are causing real distress and some members are going off sick.

‘If this change programme continues to be dragged out and poorly communicated, then it will further undermine managerial focus on removing bureaucracy, improving productivity and cutting waiting lists.

‘Functions, such as digital development, may simply collapse as people vote with their feet and seek certainty in other jobs.

‘On top of this, the redundancy bill is going to be eye-watering and, if it is not funded by government, will hit NHS finances at a time when they are already being squeezed.’

Matthew Taylor, chief executive of the NHS Confederation, which represents healthcare organisations, told the Mail: ‘The NHS needs stability and clarity if it is going to improve performance, implement the government’s ambitious reforms and make the required efficiency savings.

‘Health leaders will support the notion that a restructure is best done right over being done quickly, but only so much progress can be made when burning questions around funding arrangements for redundancy payments remain unanswered.

‘They are experiencing this themselves with the planned consolidation of integrated care boards hanging in limbo.

‘It is crucial that these next steps are communicated clearly and as soon as possible to the staff affected.

‘Transformation programmes of this scale can be hugely distracting and demoralising if not handled sensitively and effectively.’

Having initially targeted an October 2026 abolition, in recent months ministers and officials have been working towards the following April.

But the Health Service Journal said the government is now unlikely to lay its health bill in Parliament until spring 2026, rather than this autumn, as had been hoped.

The time it will take to pass is highly uncertain, but it could take until late 2026, or spring 2027.

This in turn could be too late to enact the abolition of NHSE by April 2027.

A Department of Health and Social Care spokesperson said: ‘This government will abolish NHS England and transfer all functions from NHS England to DHSC or the wider system.

‘Abolishing NHS England will make the NHS more efficient and reduce unnecessary bureaucracy, while bringing its management back into democratic control.

‘This will enable us to divert millions of pounds to the frontline for our hardworking doctors, nurses and healthcare staff – and improve waiting times and GP access for patients.’