NHSE spent £75m reducing its workforce in 2022-23

Published on: 26 Jan 2024

NHS England agreed 951 voluntary redundancies or early retirements in 2022-23 at the cost of around £75m, as it began dramatically reducing the size of the organisation, its annual accounts show.

The figure represents only the first few months of a voluntary redundancy programme, which was launched in January 2023 as part of a major restructure.

The job cuts have continued through 2023-24, and are expected to remove 6,000 to 8,000 posts by the end of the programme, equating to around 30-40 per cent of NHSE staff. This is expected to reduce the organisation’s annual running costs by £400m. 

The restructure is part of NHSE’s merger with NHS Digital and Health Education England, but also “reflect[s]… the need to resize the organisation post the pandemic,” the annual accounts explained.

Meanwhile, in his introduction to the accounts, chair Richard Meddings made pointed comments around the shortage of hospital beds the NHS is funded for, compared to neighbouring countries.

He wrote: “The NHS has around 133,000 staff vacancies and has one third of the number of hospital beds they have in Germany and less than half the average OECD diagnostic capacity.”

Mr Meddings continued: “The NHS is dealing with exponential demand growth from population increases and ageing, and from our brilliant academic medical researchers identifying ever more ways the human condition can go wrong and the ways to treat them. This demand growth is met by a system with insufficient capacity whether workforce or beds or diagnostics.”

This week NHSE reversed its decision to cut bed numbers as part of the New Hospitals Programme.

Elsewhere, the accounts also state the surge in energy costs following Russia’s invasion of Ukraine in 2022 forced NHSE to cut funding for digital and primary care.

The document says NHSE was “forced to issue additional inflation funding of £1.5bn to cover higher energy costs, a direct impact of inflation on index-linked contracts and other inflationary pressures”.

This meant it had to “reprioritise transformation funding, in particular cutting funding for digital investment and for primary care”.

In January this year NHSE announced it would be buying energy centrally to cut costs and unwarranted variation between what trusts pay for their power and gas.