The Observer view: NHS job cuts may exacerbate health service's challenges

The Guardian

16-03-2025

On Thursday, Keir Starmer pledged to streamline the 'flabby state' and take on a 'cottage industry of blockers and checkers' to deliver better outcomes for citizens. The centrepiece of the prime minister's intervention was an announcement that he would be abolishing NHS England, merging it into the Department of Health.
NHS England was created in 2012 by the then Conservative health secretary, Andrew Lansley, as part of his ill-judged, expensive structural 'reform' of the NHS. Its purpose was to put the day-to-day operational management of the NHS at arm's length from ministers, supposedly insulating it from the short-termism that afflicts governments of all colours. Since 2012, it has swelled through multiple mergers, and today oversees a huge range of functions for the English NHS, including allocating funding, sharing good practice, coordinating national programmes such as vaccination and screening, planning around future staffing, and negotiating contracts such as the price the NHS pays for medicines. In practice, research suggests that since 2012 ministers have retained a significant degree of political control over the NHS, and rightly so.
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In principle, there is nothing wrong with abolishing NHS England and merging its functions with the Department of Health; this should generate some savings, albeit marginal. However, the government appears to want to make much more radical cuts to the managerial headcount of the NHS: to cut the number of jobs not just within the central structure of the service by half – 10,000 roles – but also to cut running costs of regional integrated care boards (ICBs) by half, and to reduce the number of roles in HR, finance and communications at the NHS trusts that are directly responsible for running hospitals. This could amount to a total of between 20,000 and 30,000 fewer jobs. ICBs have already had to make 20% cuts; some leaders say this further round would compromise their ability to offer services such as vaccination programmes and blood pressure checks.
These cuts could represent a medium-term incremental saving for the NHS in the grand scheme of things – perhaps at most £1bn a year from an annual budget of close to £200bn – but, as health policy thinktanks such as the King's Fund and the Health Foundation have warned, such a significant and rapid structural reorganisation could jeopardise the NHS's focus on improving health. Large-scale reorganisations come with short-term costs – including making so many staff redundant – and the impact of a high degree of uncertainty on managers whose energy would be better focused elsewhere. It is also a huge number of people for ministers to decide to lay off during a cost of living crisis, underpinned by stagnating living standards: barely discernible in the macho government briefing about radical cuts is that there are real people doing these jobs, with real lives.
What cutting these jobs absolutely will not do is tackle the long-term challenges facing the NHS: namely, that we spend significantly less per capita on healthcare than countries such as Germany, the Netherlands, Austria and France. This is despite having an ageing population with rising health and care needs, underpinned by relatively poor levels of public health, with higher-than-average obesity levels and sharp health inequalities. Nor will they fix the NHS's frontline staffing shortages.
There is a risk that, if poorly executed, a structural reorganisation could make those challenges even harder to confront. Ministers need to be clear what it will help them achieve: more devolution? More integration of health and social care? More focus on prevention? At the moment that is not at all clear; this feels more like a bid to try to mitigate the multibillion-pound overspend NHS trusts are collectively forecasting for next year.