"Abolishing NHS England with no clear plan for cuts left uncertain future for patients and staff" says new PAC report

Forthcoming staff cuts and NHS England's (NHSE) abolition have caused great uncertainty for all involved with the health system. In a report on the Department for Health and Social Care's (DHSC) Accounts 2023-24, the Public Accounts Committee (PAC) underlines its concern at the impact this uncertainty may have on patients and staff.

The Government announced that it would abolish NHSE and centralise its functions into the DHSC during the PAC's 13 March 2025 evidence session. It has still not set out how this major structural and operational change will impact key services and targets to improve patient care. Other areas where government was unable to provide clarity to the PAC's inquiry include:

• The lack of a clear plan for how DHSC and NHSE will achieve significant headcount reductions, and the costs involved;
• How the reductions fit in with the wider 10 Year Health Plan for the NHS;
• How savings made from reducing NHSE staff costs help frontline services;
• How the institutional knowledge of NHSE would be preserved following its abolition;
• The scale of headcount reductions in the DHSC, and the geographical spread of the planned 50% headcount reductions in NHSE and across local Integrated Care Boards.

In the area of clinical negligence, the PAC is disappointed that huge improvements still need to be made to better protect both patients and public money. An astounding £58.2bn has been set aside to cover the potential cost of clinical negligence events in the latest accounts – the second largest liability across government after nuclear decommissioning. An astronomical 19% of money awarded to claimants in 2023-24 goes to their lawyers (£536m of the total £2.8bn paid that year), on top of the fees payable for the Government Legal Team. Behind these jaw-dropping figures lie many tragic incidents of patient harm, and the PAC is calling on government to set out a plan with clear actions to improve patient safety across the NHS, and in particular in maternity services.

As well as clinical negligence and severance payments, the report also highlights a lack of information provided by the DHSC in other key areas of interest to the PAC and Parliament. Its accounts contain no clear overarching narrative on social care, with a lack of clear data on productivity; prevention; digital and artificial intelligence; and palliative and end-of-life care.

Also scrutinised in the report is the development of a new site for high containment labs central to protecting the population against infectious diseases by UK Health Security Agency (UKHSA). The building of new facilities at Harlow has been poorly overseen, with a now over-decade long programme's costs rising from an initial estimate of £530m to an eye-watering projected £3.2bn. No decision has yet been made on the future of the site on which £400m has been spent on development so far with little to show for it, and delays could risk leaving the nation without adequate protection against emerging new diseases. With time running out as current facilities near the end of their life, the report calls for UKHSA to urgently outline how it will ensure that the UK continues to have the infrastructure it needs to protect public health.

Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: “Our report shows a health system still under pressure on a number of fronts, pressure which will need strong decision-making from government to begin to be relieved. One significant decision, the abolition of NHS England, was announced whilst our Committee was questioning senior health officials. All those who work for NHSE deserve our ongoing gratitude for their efforts to safeguard the nation's health. But it has been two months since government's decision to remove what up until now has been seen as a key piece of machinery without articulating a clear plan for what comes next, and the future for patients and staff remains hazy.

“These changes also require 50% reduction in local health board staff, including frontline services such as health prevention, GP services and dentistry. These services are usually the first interaction a patient has with the NHS, so we will require further reassurance and clarity on how government intends these changes to play out on the local level.

“The fact that government has set aside tens of billions of pounds for clinical negligence payments, its second most costly liability after some of the world's most complex nuclear decommissioning projects, should give our entire society pause. This is a sign of a system struggling to do right by the people it is designed to help. It must be a priority of the highest order for government to reduce tragic incidences of patient harm, and lay out a mechanism to reduce legal fees to manage the jaw-dropping costs involved more effectively.

“Our Committee has also returned with this report to the vexed question of new high containment labs at Harlow. Of all the projects to have been poorly overseen, the lack of clear direction on a critical piece of infrastructure designed to keep us all safe from infectious disease is particularly alarming. Our Committee will continue pressing government on this until it is firmly on track.”

Notes to Editors

The Interim Permanent Secretary of the DHSC wrote to the PAC Chair on 29^th April 2025 setting out current and future plans for delivering sustained NHS productivity improvements. He also wrote to the PAC Chair on 23^rd April 2025 with further information on Infected Blood Support Schemes and clinical negligence.

The Committee's January 2025 report on NHS financial sustainability found that government's NHS ambitions ran counter to officials' lack of ideas or drive to change. Government responded to questions from the Health & Social Care Committee on 28 February 2025. Government's formal response to the report will be published in due course.

The Committee's inquiry on the UKHSA Health Security Campus warned that costs had risen by 500% with the project at least 15 years behind schedule. You can read the PAC's 24 May 2024 correspondence here; you can read the government's response here.

The PAC Chair further wrote to the DHSC and UKHSA on the health security campus programme on 16 January 2025. You can read the 6^th March 2025 response here.

PAC report conclusions and recommendations 

The announcement of the abolition of NHS England, and staff cuts across the Department, NHS England, and Integrated Care Boards, has created high levels of uncertainty for patients and for staff. During our evidence session the government announced that it would abolish NHS England and centralise its functions into the Department. This is a major structural and operational change for the Department and its organisations, but it has not yet set out how this will impact key services and targets to improve patient care. With over 1.7 million patient interactions per day and 1.5 million staff in the NHS, we are concerned about the impact that this uncertainty may have on both patients and staff. It is disappointing that the Department and NHS England do not have a clear plan for how they will achieve the required reductions in headcount, and are unable to articulate the costs involved. The reductions have been announced prior to the finalisation of the NHS' 10-Year Health Plan, and therefore we do not yet know how these fit with the wider plans for the NHS. This includes not knowing how the savings made from NHS England's reduced staffing costs will translate into a stable financial footing for frontline NHS services. During the restructure, it will be essential to maintain and protect the effective local delivery relationships that are so critical to delivering good quality patient care. The changes should also preserve the place-based approach to retain close and effective working relations with local councils, directors of public health and local GPs.

Recommendation 1.

1. a) Within the next 3 months, the Department must reflect on the lessons learnt from previous structural changes and share with us its plan and timetable for the structured transfer of NHS England's functions to the Department, including the resources it will now have for each of its key responsibilities, and any activity it will cease.
2. b) The changes should preserve the place-based approach to retain close and effective working relations with local councils, directors of public health and local GPs.

The Department's accounts do not provide sufficient information on key long-term financial pressures facing the health and social care system. Despite it being jointly responsible for health and social care in England, the Department's accounts overwhelmingly focus on health services and do not give a clear overarching narrative on social care. The Department's accounts contain very little information in key areas of interest to us, and to Parliament. This includes a lack of financial data on the prevention of ill health in the first place, which has the biggest long-term impact on health outcomes, and on technological advances, which are needed to improve future productivity for the NHS. While the Performance Report section of the Department's Annual Report and Accounts contains some high level information on these areas, there is a lack of detailed financial data to set out how money has been spent in these areas. The Department's accounts also do not provide information in enough detail to allow Parliament or the public to establish whether legal costs relating to exit packages and employment tribunals represent a good use of public funds, or provide the best outcomes. The Department is unable to tell us how much is spent on palliative and end-of-life care, nor what outcomes were delivered through this spending.

Recommendation 2.

1. a) In line with its Treasury Minute response, the Department should write to the Committee to set out its plans to improve the transparency and usability of its Annual Report and Accounts in the following areas: social care; productivity; prevention; digital and artificial intelligence; palliative and end-of-life care; severance and clinical negligence payments; and any new and emerging areas of Parliamentary and public interest.
2. b) All future annual reports and accounts should be very clear about what productivity and efficiency gains have been made during the year and how. Also, a prediction for future years should be included.

There is little to show for the £400 million spent so far on the development of Harlow Health Security Campus, with no decision yet on the future of the site. This is an example of a poorly overseen project to replace the UK's critical public health infrastructure. UKHSA's high containment laboratories are central to protecting the population against potentially highly infectious diseases. The current facilities at Porton Down and Colindale are nearing the end of their life. The programme to build new facilities at Harlow has been underway for over a decade, and the cost of the current plan has risen from the initial estimate of £530 million to an eye-watering projected £3.2 billion. UKHSA has developed an alternative proposal involving modernising the existing facilities at Porton Down and Colindale. The decision between these two options is complex. The final decision is currently being made by Ministers and is expected in the second part of the spending review. But this is still some 3 years after the programme was suspended. As well as having cost implications, these delays could risk leaving the nation without adequate protection against emerging new diseases. UKHSA estimates its current facilities could continue to operate for 15 years, and in 2024 the NAO reported that the earliest date for having a fully operational new or upgraded site is 2036, 11 years from now. Time is running out for UKHSA to decide on the best course of action in order to avoid exposing the public to any unnecessary risk.

Recommendation 3.

1. a) In line with the recommendations this Committee made in May 2024, UKHSA should urgently outline how it will ensure that the UK continues to have the infrastructure it needs to protect public health, and confirm its plans for its high containment laboratories, including setting out full costs and timeline for completion. In light of spending review, and given UKHSA's poor record of delivering new facilities, it should set out as soon as possible, exactly what the arrangements are in respect of accountability, oversight, and the involvement and status of delivery partners.
2. b) The Department should ensure it establishes effective oversight of funding for all major health infrastructure projects, starting with ensuring these are based on a realistic assessment of the costs.

It is unacceptable that the Department is yet to develop a plan to deal with the cost of clinical negligence claims, and so much taxpayers' money is being spent on legal fees. The Department has set aside an astounding £58.2 billion to cover the potential costs of clinical negligence events occurring prior to 1 April, the second largest liability across government. Some £9.3 billion of that £58.2 billion relates to events occurring in 2023-24, when it also paid out £2.8 billion on clinical negligence claims. Behind these jaw-dropping amounts lie many tragic incidents of patient harm. The Department has only recently written to us in response to the previous Committee's recommendation which was to set out, by summer 2024, the key reasons for patient harm and the actions it will take to address these. In addition, the Department says that an astronomical 19% of the money awarded to claimants goes to their lawyers, on top of the fees payable for the Department's defence team. We are disappointed that huge improvements still need to be made to better protect both patients and public money.

Recommendation 4. Within the next 6 months, the Department should set out a plan with clear actions to:

1. a) Reduce tragic incidences of patient harm to as low a level as possible; and
2. b) Manage the costs of clinical negligence more effectively, including introducing a mechanism to reduce legal fees.
3. c) Improve patient safety across the NHS and in particular in maternity services.

We are disappointed by the Department's continued failure to return to publishing its accounts before the summer Parliamentary recess. Timely production of accounts is essential to understanding public finances and supporting accountability and Parliament expects Departments' accounts to be published before the summer recess each year. Yet the Department has failed to deliver its accounts on time for each of the last five years, which hampers effective and timely accountability of taxpayers' money. The Department is making some progress and published its 2023-24 accounts on 17 December 2024, nearly six weeks earlier than its 2022-23 accounts. But this is still five months later than the timescale needed to meet the expected pre-summer recess delivery. Weaknesses in basic financial accounting at UKHSA, together with delays in the completion of local NHS audits have continued to cause the accounts to be late. The absorption of NHS England into the department will need to be carefully planned in the accounts production and auditing process, otherwise timelines could slip backwards.

Recommendation 5. By the start of September 2025, the Department must write to us with a realistic and credible plan to produce audited accounts before the summer Parliamentary recess. This must include how it will:

1. a) Effectively support and hold group bodies to account to ensure they produce accounts of appropriate quality on a timely basis; and
2. b) Work with stakeholders across the local audit system to build capacity, resilience and ensure deadlines are met in particular given organisational changes.

NHS England does not have a coherent plan to better protect taxpayers' money and prevent future unapproved exit packages.There remain far too many special severance payments where approval has only been sought after the payment has been made. Five such unapproved payments totalling £180,868 were made by NHS trusts in 2023-24. Without approval, this expenditure has not been spent in line with Parliament's expectations. NHS England's plan to stop such payments occurring in future has been to remind providers of the rules in place. However, it has acknowledged that solely reminding providers is not enough to guarantee future unapproved payments will not happen. NHS England is also unable to identify any meaningful consequences for trusts that would act as a deterrent.

Recommendation 6. As part of its Treasury Minute response, NHS England should set out how it will ensure that all exit packages receive the appropriate approvals in advance of payment being made, including details of consequences for non-compliance with the rules. Given the proposed scale of redundancies it should set out how its new approvals mechanism can be enforced to prevent even more unauthorised severance payments.

This should include how it will ensure that this corporate knowledge and any lessons learned are not lost when it is abolished and its functions are taken on by the Department.