Labour’s NHS job-cutting plan is in disarray due to a £1 billion cost dispute. The union claims that the restructuring plan is in disarray because integrated care boards in England cannot afford severance payouts.
A union claims that Labour’s dramatic reform of the NHS has slid into disarray, with a massive programme of job cutbacks stalled due to a dispute over who will pay the £1 billion tab.
Due to health service cost-cutting measures, the 42 integrated care boards (ICBs) of the NHS in England were expected to lay off up to 12,500 of their 25,000 employees by the end of the year.
However, an increasing number of ICBs have been forced to put their plans to cut staff on hold because they are unable to pay the associated expenses, which can reach £42 million each.
“The redundancy bill will be eye-watering and well beyond the means of ICBs, even before their budgets are slashed by up to half,” stated Restell, the CEO of Managers in Partnership, an organisation that represents a large number of ICB employees. The cost will have to be borne by the government.
“Our people are becoming more and more upset and in need of clarification. ICBs are doing their best to notify staff, but given the pandemonium, they are at a loss for words.
In response to ICB leaders’ request for an immediate cash infusion from the Treasury to cover severance payments, NHS England is in negotiations with the Department of Health and Social Care (DHSC). In the hopes that the talks will put an end to the uncertainty, planned job losses have been delayed.
Health unions claim that because ICB employees do not know how long they will be employed, they are left feeling anxious, perplexed, and in a state of uncertainty. Some employees are so stressed out that they are being forced to use sick days.
In an effort to “reset” its finances and Wes Streeting’s reorganisation of the health sector, NHS England instructed the 42 ICBs to reduce their operating expenses by 50% in March. By the end of December, the regional NHS bodies known as ICBs ought to have decided which employees they would be letting go.
However, several ICBs have cancelled their redundancy programs since they are unable to cover the associated costs without going above this year’s budgets, which they were told to adhere to prior to the planned layoffs. They have issued a warning, stating that until they have the necessary funds, they cannot begin to lay off what is anticipated to be between 300 and 400 employees apiece.
North East and North Cumbria ICB, for instance, has stated that the anticipated cost of possible redundancy “has not been able to get under way due to the projected cost of potential redundancy not being able to [be] met in 2025-26.” They would like to consult on layoffs.
“Starting the consultation without clarity from NHS England on the funding of the redundancy costs associated with implementing this nationally mandated requirement would add increased risk to the delivery in the integrated care system [financial] plan,” stated Sam Allen, the company’s chief executive, in a paper to her board.
Since they are unsure if they can afford the predicted £1 billion in redundancy expenses, a number of other ICBs have also put a halt to their consultation processes, including those pertaining to south-west London, South Yorkshire, West Yorkshire and Humber, and North Yorkshire.
Lincolnshire, Derbyshire, Nottinghamshire, Northamptonshire, and Leicestershire ICBs anticipate further staff reductions in 2026–2027, despite the fact that the ICBs’ budgets for the next year, which have already been determined, are predicated on the workforces being nearly halved by that time.
Ministers were recently cautioned by Dr. Kathy McLean, head of the Nottingham and Nottinghamshire ICB, that months of effort by ICBs to get ready to be reorganised into a considerably smaller number—15 “clusters” and 11 ICBs—had “come to a standstill” due to the associated costs.
“The Treasury and NHS England standoff over who will pay for redundancies just adds to workers’ sense of worry and anxiety,” stated Helga Pile, the union Unison’s head of health. The way the situation has been handled has been a complete mess. Employees remain in limbo in the meantime, unsure of their employment status for the upcoming year.
ICB representatives have claimed that NHS England first said it would pay for the layoffs, which has increased tensions over the decision. Jim Mackey, the CEO of NHS England, has refuted that. “We never said there was a central pot of money” that ICBs could draw from, he told members of the Commons health and social care committee on September 9.
At the same hearing, however, NHS England’s financial reset director, Glen Burley, stated that “we will have to be flexible” regarding the directive to ICBs to cut their operating expenses in half by the end of 2025, given the uncertainty surrounding the job losses and the sluggish pace thus far.
“Too much funding has been diverted to the back office at the expense of the frontline over the past 15 years,” a DHSC official stated. Vested interests always protest when significant changes are made, but this government is only concerned with enhancing patient care.
“Over the next few years, efficiency savings will allow us to invest billions more in healthcare in the most underserved areas of our nation, and this government was able to give NHS staff another pay increase above inflation this year.”
“ICBs have worked tirelessly to identify savings that can be reinvested back into patient care, and several of them have well-developed plans for restructuring which we are supporting them with,” stated a representative for NHS England.