NHS shake-up pay-outs 'top £80m'

By Angus Crawford
BBC News

SHAs were reorganised last year

The reorganisation of strategic health authorities (SHAs) in England has seen the NHS pay out more than £80m in redundancy costs, the BBC has learned.

More than 700 staff lost their jobs in last year's shake-up, which saw the number of SHAs reduced from 28 to 10.

The cost of the average redundancy package for senior managers was more than £350,000.

Opposition parties criticised the cost of the redundancies, but the government said it was just a short-term cost.

These are the kind of costs that result from endless reorganisations. Not one penny contributes to the health of patients Andrew Lansley, shadow health secretary

The BBC obtained the figures from the 10 SHAs using the Freedom of Information Act.

Twenty-eight SHAs were set up in 2002 to supervise local health services in England.

Their job was to co-ordinate care and deliver government policy.

But three years later ministers announced £250m had to be cut from red tape and four years after they were created the regional bodies were merged into 10.

Some 764 people were made redundant or took early retirement at a cost of £82.89m.

That included 61 senior managers. Their redundancy packages cost an average of £358,355.

Deal

One chief executive's early retirement deal cost his SHA £900,000.

But the Liberal Democrats say the true cost of the changes must include the re-organisation of primary care trusts, which were reduced from over 300 to 152 last year.

They claim that the cost of those mergers could be as high as £60m, making a total bill for the changes of more than £140m.

Liberal Democrat health spokesman Norman Lamb said: "This is the price we're paying for botched reforms."

"The government rushed into ill thought out reform...when the system didn't work they changed it."

Shadow Health Secretary Andrew Lansley added: "These are the kind of costs that result from endless reorganisations. Not one penny contributes to the health of patients."

Health officials from the SHAs said cutting the jobs will lead to less bureaucracy and put more money into front-line services.

And a Department of Health spokeswoman said: "Inevitably there will be short-term costs as a result of reorganisation and it is right that NHS staff who are made redundant get what they are contractually and legally entitled to.

"However, the long-term benefits far outweigh any short-term costs."