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£100m redundancy budget set for NHS England, HEE and NHSD

Published on: 9 Feb 2023

NHS England is set to spend up to £100m on voluntary redundancies and associated costs, as part of its restructure and merger with NHS Digital and Health Education England, the next phase of which is being announced today.

The restructure altogether would save around £400m per year from 2024-25, NHSE said.

The £100m redundancy pot is expected to cover at least 1,000 departures, as well as associated costs, such as legal advice made available to staff, NHSE said. The number of departures covered by the cost will vary depending on who applies and is accepted to the scheme. Crudely, the figures suggest a mean average cost approaching £100,000 per person, although there is likely to be wide variation.

The scheme, launched three weeks ago, was due to end this week, but has been extended by two weeks for those affected by restructure decisions announced to staff today. 

Proposed staffing structures for several consolidated departments have been released today, including transformation, tech and workforce, which would reduce overall headcount across the organisations by around 3,100. 

This represents the first phase of a major restructure, announced last autumn, which is due to remove up to 6,000 to 8,000 posts in total, equating to around 30-40 per cent of staff

The first phase includes many NHS Digital and HEE teams, although HEE’s large regional teams have been excluded. 

Further phases are due to happen through spring and summer, and NHSE said the programme was on track, and all staff would know their future by the end of September.

In an update on the restructure so far, NHSE told HSJ:

  • The changes overall are still due to take out 30-40 per cent of posts from the three organisations, as announced last autumn, amounting to 6,000-8,000 posts.
  • This will save £400m in annual running costs in 2024-25. It declined to give a baseline or final target spend, but published data suggest annual staff costs were about £1.5bn in 2022.
  • In the first phase beginning today, there is due to be a 33 per cent reduction in posts among transformation directorate/NHSD staff, from 7,487 to 5,031. This includes a 40 per cent reduction in “executive senior manager” posts.
  • Workforce teams affected by the first phase will be reduced by 38 per cent, from 1,665 to 1,028, including a 39 per cent reduction in ESMs. The numbers are much smaller than in transformation/NHSD because it was decided to exclude many HEE staff in regional and infrastructure teams from this phase.
  • NHSE said that, after the complete restructure, the new organisation will be less than the combined size of NHSE, NHSD, and HEE before the covid pandemic (while they have added some new programmes such as covid-19 vaccination and the new hospital programme). Published data shows their combined staff (including temporary staff) grew by 5,810 (45 per cent) during the period (see chart below).

Equality, diversity and inclusion posts

As part of the workforce team changes, NHSE said there will be large reductions to the number of staff working in dedicated equality, diversity and inclusion teams, including removing existing senior EDI director posts.

NHSE chief workforce officer and HEE chief executive Navina Evans set out NHSE’s approach to EDI in a comment piece this week, which she said would make it “mainstream”, and involve more work via its other directorates, including the large operational/regional teams.

NHSE said there would still be a small EDI team which will produce data, such as for NHSE’s “equality standards”, but will do less work directly with local NHS organisations. Dr Evans would be held to account for embedding EDI in its other work, she said. 

NHSE chief delivery officer Mark Cubbon said in a statement: “There are benefits to bringing together NHS England, NHS Digital, and Health Education England for everyone – for providers and local systems it will reduce duplication and bureaucracy, giving them more control.

“For the taxpayer this process will deliver £400m in savings a year – by its completion – money that can be reinvested into frontline care and for our staff, they will have clarity on their roles and clear direction for how they can continue to deliver for patients.”