NHS: Reorganisation

Baroness Williams of Crosby Excerpts

Thursday 24th March 2011 Lords Chamber

Asked By

[Baroness Williams of Crosby]

To ask Her Majesty’s Government what is their latest estimate of the cost of the reorganisation of the National Health Service and what proportion of that is due to redundancy and early retirement.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the Government published an impact assessment alongside the Health and Social Care Bill. This estimated the costs of the transition at £1.4 billion. Just over £1 billion was estimated to be as a result of redundancy. The £1 billion has not been split into redundancy and early retirement as these decisions will be made at a local level. The proposed reforms will save £1.7 billion per year from 2014-15 onwards.

[Baroness Williams of Crosby]

I thank my noble friend for that Answer, but I am aware that the National Audit Office, on the basis of its own surveys, has indicated a considerably higher figure. In an important article written by the professor of medical health at the Manchester Business School, the estimates are between £2 billion and £3 billion. Could my noble friend tell us the cost of the redundancies that have arisen from PCTs being brought to an end and people moving into the new consortia, and whether that figure is part of the figure that he has given to the House?

[Earl Howe]

My Lords, I would do best to refer my noble friend to the impact assessment, which provides a detailed breakdown of the figures that I have just given. I acknowledge that we have had to make assumptions in drawing up the impact assessment. Those can be challenged, and I am aware of the figures that my noble friend has referred to. But I do not believe that changing the figures—and they are bound to change in the nature of the exercise—will make a significant difference to the overall cost. The assumptions made in the modelling are based on the best available evidence that we have at the moment.