The NHS in England is setting up a £2 billion fund to cover redundancy costs as staff brace themselves for “brutal” job cuts to help plug a £20 billion financial hole.
For the first time, this year’s national operating framework, in which the Department of Health sets out the NHS’ priorities, requires the country’s 152 primary care trusts to retain “at least” 2% of their budget to spend on one-off “change” projects such as redundancy, retraining, redeployment and setting up new services.
Trusts are already also required to hold back £1 billion to help balance the books in case of overspends or to pay for unexpected emergencies such as the flu pandemic.
But although the new Health Secretary Andrew Lansley had formerly said that desired efficiency savings would not necessarily equate to cuts, the existence of the new £2 billion pot has prompted speculation that staff could bear the brunt of such measures.
Personnel who work in hospitals are expected to be particularly vulnerable because as much as two thirds of funding in this area goes on labour costs and some hospitals are already reducing their headcount.
Southampton Hospitals Trust is cutting 400 jobs this year and 200 more in 2011 out of a total of 8,000. Cambridge University Hospitals Trust, which includes Addenbrooke’s, and Liverpool’s Alder Hey Hospital have both asked interested personnel to apply for voluntary redundancy.
Dr Paul Flynn, deputy chairman of the British Medical Association, said he hoped that redundancies would not be the first thing that the new fund was used for, but job losses seemed inevitable.
“We hear about the drugs budget and other areas where savings can be made, but staff costs are the biggest single cost the NHS faces,” he added. “Health is an emotional issue and during the election, the parties did everything they could to avoid saying anything to indicated they will hit the NHS. But it is naive to think there won’t be some effect.”
Michael Sobanja from the NHS Alliance, which represents staff working outside of the hospital domain, agreed. He told the BBC: “I think it is pretty clear headcount will drop. The NHS is facing a pretty brutal time.”
