NHS reforms cost £435mn in staff pay-offs

Guardian News and Media/LondonAlmost half a billion pounds has been paid out to NHS staff made redundant as part of the government’s controversial health shakeup, leading to warnings that private companies are stepping in to fill the vacuum at the heart of the health service.The government’s sweeping health act, the biggest single set of changes experienced by the NHS, replaced 170 organisations with 240 new ones, but resulted in the loss of 10,094 posts.Data from the National Audit Office (NAO) shows that taxpayers paid out more than £435mn, an average of £43,095 per worker, in redundancy payments.However, this figure masked a marked difference in pay levels. There were 44 “very senior managers” made redundant between August 2012 and March 31, 2013, the NAO said, with an average payoff of £277,273. The payoffs ranged from £33,771 to £578,470.More than 2,000 staff who lost their jobs between May 2010 and September 2012 were re-employed in the NHS.The NAO said the changes had cost £1.1bn to March 31, 2013, which was 15% more than expected.The trade union-funded NHS Support Federation says that while jobs were lost in the NHS, there had been a “private sector bonanza”.The government’s new competition rules, which came into force in April, mean that clinical commissioning groups (CCGs) -  family doctors who now hold the purse strings in the NHS - will be forced to put services out to tender or face possible legal action from a disappointed private contractor.The result, says the federation, is that more than 100 contracts have been put up for privatisation.According to the study, only two contracts put out to tender were won by the local NHS. The latest contract notice is the biggest so far -  to run community services in Cambridgeshire, worth £800mn over five years.Services going out to tender include a further five contracts for out-of-hours services, an area where regulators have had to step in due to poor performance.In Wiltshire, community maternity services have been put on the market. Given how central CCGs are to the process, there are worries about the lack of credible financial plans.The NAO warned that such deficiencies “raise concerns about their ability to make savings and remain financially sustainable in the coming years”.Campaigners say the system is being fragmented by design, with increasing complexity ushering in a period of instability in the NHS.Paul Evans, the federation’s director, said: “Far more NHS treatment is being purchased through the market; billions of pounds of public money is up for grabs. Some will go to the NHS but, from this analysis, it looks like the lion’s share could be secured by the private sector. It is hard to see how we will manage to keep the principles of the NHS intact.” Andrew Gwynne, the shadow health minister, said the government “has placed the NHS on a path towards privatisation”. Gwynne said the NAO report “lifts the lid on the government’s shambolic re-organisation of the NHS. Ministers took £3bn away from patient care and blew it on redundancy payoffs, leaving thousands of jobs unfilled.“Since David Cameron entered Downing Street, over 4,000 nursing posts have been axed and one in 10 hospitals are now short-staffed.”