The Department of Health and Social Care will launch a voluntary-exit scheme in the coming weeks against the backdrop of plans to rebalance central government's control over the National Health Service, MPs have been told.
Keir Starmer announced plans to abolish NHS England this morning in a speech on civil service reform and regulation – saying the move will bring management of the NHS "back into democratic control".
The prime minister said he "can’t, in all honesty, explain to the British people why they should spend their money on two layers of bureaucracy" at DHSC and NHSE.
"I don’t see why decisions about £200bn pounds of taxpayer money on something as fundamental to our security as the NHS should be taken by an arm’s-length body, NHS England," he said.
Speaking at a Public Accounts Committee session this morning that started shortly beforee the PM's speech, acting DHSC perm sec Prof Sir Chris Whitty said staff at the department had been made aware of the plans for the voluntary-exit scheme – which comes on top of an existing recruitment freeze. He said there was no target for the number of jobs to be cut.
The move is part of a shakeup of the health service designed to transfer power from NHS England to DHSC. It has already seen NHSE chief executive Amanda Pritchard, chief financial officer Julian Kelly, and chief operating officer Dr Dame Emily Lawson announce their resignations.
Earlier this week, it emerged that NHSE is looking to halve its 15,000-strong headcount and seeking administration savings of around 50% from integrated care boards, which fund the majority of local NHS services in England, including for hospitals and GPs.
Whitty told PAC that DHSC is now looking to reduce its 3,600 headcount beyond the scope of the current recruitment freeze.
Whitty, whose official government role is chief medical officer for England, said the cap on new external appointments at DHSC will continue "for some time" and will shortly be augmented by a voluntary-exit scheme.
"This is in with Cabinet Office and Treasury, but I don't anticipate them saying 'this is inappropriate'," Whitty said. “I would anticipate this opening – and I’ve said this to staff – hopefully before Easter. If we do it before Easter, that will – at least in an initial phase – run through to probably about November of this year.
"What that doesn't do is take into account the consequences that need to be thought through of our relationship with NHSE. I think we need to do that properly, from the base up, and ask the question – and the secretary of state needs to make the final decision: 'What is the shape and size of the organisation that we want as a result of the changes?'"
Whitty said the cap on recruitment and voluntary exit scheme are a response to the government's view that the "overall system" should be smaller.
However, he said that plans to integrate the work of NHSE and DHSC will have "a lot of consequences" and predicted a further stage of staffing reform as plans firm up.
He insisted ministers have no target for reducing DHSC headcount. "We do not want to do a number until we're clear what we're trying to build from the base,” he said – suggesting that more certainty would be required about the future interaction between the department and the NHS.
“NHSE have chosen to put forward some numbers,” Whitty said. “But the view of our secretary of state – and this very much follows what the chancellor of the Duchy of Lancaster said about the civil service as a whole – is what they want to do is review.
"In my view, it should be reviewed with the incoming permanent secretary. But either way review which bits of the service need to change, either as an overall result of the changes to the civil service or the specific ones which fall out of the changes with NHSE and the way that interactions between NHSE and the department occur.”
Soon-to-depart NHSE chief financial officer Julian Kelly told this morning’s session that halving the organisation’s 15,000-strong headcount would save about £400m a year. He said halving the non-frontline headcount of ICBs would save an additional around £750m a year.
DHSC director general for finance Andy Brittain said the department’s current recruitment restrictions would save around £15m a year, based on “7% natural attrition”.
Whitty pointed out that DHSC's headcount is small in comparison to the size of NHS trusts. He added the voluntary-exit scheme would not save any money for the department in its first year because of the cost of compensation packages.
“You would expect to get savings somewhere between six and 18 months afterwards,” he said.
Answering questions after his speech this morning, Starmer said one of the key reasons for axing NHSE is to reduce duplication of roles.
"If you can believe it, we’ve got a communications team in NHS England, communications team in the health department of government. Got a strategy team in NHS England, a strategy team in the government department," he said.
"If we strip that out, which is what we’re doing today, that then allows us to free up that money to put it where it needs to be, which is the front line."
The PM said the move is an example of his willingness to "take difficult decisions".
"Obviously, the people in NHS England are hugely qualified, highly skilled, doing a fantastic job, and we will work with them in relation to what comes next. Of course we will, because I believe in dignity and respect at work," he said.
"I’m not abandoning anybody in this," he added.