A MASSIVE new reorganisation aimed at tightening financial controls on the NHS hit news headlines on March 13 with Sir Keir Starmer’s surprise announcement that NHS England (NHSE) is to be abolished.

Few campaigners will shed many tears at the dismantling of NHSE. Its role from the beginning was as the “national commissioning board” overseeing the competitive market for healthcare established by Andrew Lansley’s disastrous mega-“reform” that took effect from 2013.

But nor is there any obvious enthusiasm to go back to the previous model of New Labour’s market-style reforms, primary care trusts, strategic health authorities, privatisation and “world-class commissioning” — although that does seem to be the model that Streeting and Starmer are hoping to recreate.

The fact is that despite being notionally “independent” and “at arm’s length” from ministers, NHSE has always obediently followed up every government push for greater use of private-sector providers.

In 2016-17 it was NHSE that attempted to carve England’s NHS into 44 “footprints” and force through rapid reconfiguration through “Strategic Transformation Programmes,” which have in almost every case proved impractical as well as unpopular.

In 2019 NHSE faced down furious complaints from all parties and health professionals in the area to drive through a privatised imaging contract in Oxfordshire.

NHSE has never criticised the year after year of under-funding, even as it struggled to force trusts and ICBs to stick within their limited budgets as demand for services has increased.

Last autumn, with A&E demand running at record levels, and patients lined up on trolleys along hospital corridors, NHSE issued guidelines on how best to deliver “safe and good quality care in temporary escalation spaces” (aka corridors). This was angrily dismissed by the Royal College of Emergency Medicine as “normalisation of the dangerous.”

In January NHSE again complied with Starmer and Streeting’s eagerness to embrace private-sector providers by signing an agreement with the private sector, committing to long-term profitable contracts for private providers to treat elective patients — in return for the private sector increasing investment … to expand its own facilities.

The agreement even committed to include the private sector in local NHS planning and decision-making — something Tory ministers had been willing to rule out.

So the scrapping of NHSE is not part of a privatisation agenda: it must be about much closer direct control by Streeting, the Department of Health and Social Care bureaucrats — and behind them the Treasury.

The abolition of NHSE has of course been dressed up by Starmer as part of a broader mission of establishing “democratic control” in the NHS, slashing bureaucracy and putting politicians in charge.

However, the end result seems certain to be an increasingly brutal top-down, centralised imposition of what threatens to be an unprecedented round of spending cuts in an effort to stem increasing deficits.

Unlike NHSE, which publishes its board papers and streams its meetings online, the DHSC Board functions behind closed doors, and is not subject to any external scrutiny.

Far from opening up accountability, the unpopularity of the measures will drive even more local trusts and ICBs into taking their more controversial decisions in secret sessions, and thus inevitably further limit the already minimal level of NHS accountability to local communities.

The tight limits on running costs seem also designed to force the mergers of smaller ICBs (especially in the Midlands and in the south west) as well as NHS and foundation trusts: in each case, the result will again be even less transparency and local accountability, plus the danger of reduced local access after trust mergers if “duplicated” services are “centralised".

The abolition announcement was preceded by increasingly threatening statements on the need to end a “culture of overspending” by trusts and Integrated Care Boards (ICBs), claims that NHS productivity has fallen compared with pre-pandemic, and calls for cuts in management costs.

On February 25 NHSE CEO Amanda Pritchard announced she would be stepping down at the end of March, and replaced by Sir Jim Mackey, CEO of Newcastle Hospitals and former CEO of NHS Improvement.

Mackey has fuelled the increasing pressure by revealing the results of initial financial plans submitted to it by ICBs, and flagging up the potential total deficit of £6.6 billion in 2025-26 (even though this is only slightly higher than the potential £6 billion gap for 2024-25 at the same stage last year.)

Last year there were warnings that the deficit was leading to “horrible” conversations about potential cuts in patient services and an “unpalatable” list of service reductions. ICB plans included a total of £8 billion in “cost savings.” But few concrete details have emerged on how these savings have been sought at the local level.

The pressure for drastic action to put the NHS back into balance was further intensified by the government deciding to massively increase defence spending, but without making any corresponding tax increases — leading to hugely controversial cuts in welfare and a de facto freeze on other public service spending.

The pressure reached a peak in the run-up to the national meeting of ICB leaders that took place on the same day as Starmer’s announcement, March 13. The Health Service Journal had warned on March 10 that desperate measures were being considered by NHS trust and commissioner bosses to cut back on spending.

It reported local NHS leaders saying that they could be forced to consider measures such as: closing recently opened cancer testing centres; reducing the size of “virtual wards”; cutting funding for voluntary and charitable “third-sector” providers (despite the damage it would obviously do to them); cutting out-of-hours “waiting list initiative” schemes and cancelling plans for “elective hubs”; cutting corporate and non-clinical staff numbers,
and in some areas also cutting clinical staff; some leaders were also looking at additional contentious measures such as watering down doctors’ terms and conditions.

On March 10 Wes Streeting announced NHSE had to halve its already reduced 13,000 workforce. Two days later Mackey told England’s 42 ICB chiefs by phone that they have just nine months to cut their running costs by 50 per cent, hard on the heels of a 30 per cent reduction imposed in 2023. Trusts, too, would be required to cut their management costs.

The whole process culminated on March 13. While Starmer in Durham announced NHSE was to be abolished and its functions absorbed by the DHSC, a large gathering of local health leaders in London heard Mackey outline the dire financial situation and the kind of harsh measures that will be required in many areas to address looming deficits.

According to the HSJ report, Mackey insisted the recent approach to financial planning was “no longer acceptable.” The whole NHS in England needed a financial “reset.” In addition to the 50 per cent cuts in ICB management budgets and telling trusts to cut their “corporate services” budgets (like HR, finance, and communications) back to pre-pandemic levels, the onslaught goes further.

Mackey reportedly called for all trusts should consider a new two-tier workforce, in which non-clinical support staff would be transferred to subsidiaries (subcos) in order to reduce costs by avoiding VAT. The subcos could then employ new staff on inferior, non-NHS pay, terms and conditions.

It’s not clear whether the Treasury has been informed of the extent to which NHS “cost savings” could potentially rely on blatant tax-dodging, or what their reaction might be.

Mackey also announced plans for an NHS-wide voluntary redundancy scheme, aimed at non-clinical staff. However, it’s clear that clinical jobs are far from immune from the coming pressure to save cash, regardless of knock-on cost or consequences. Mackey told the meeting that he and NHSE would support trusts that decide to cut clinical staffing levels, and would not insist they pay any attention to concerns raised by regulators or by Care Quality Commission reviews.

Just as we saw in the cash-driven Mid Staffordshire Hospital scandal after 2008, patient safety will play second fiddle to balanced budgets as a harsh new regime cracks down on England’s NHS.

It’s little consolation that ministers will be exposed as directly responsible for the failings their policies generate.

John Lister is a founder member of Keep Our NHS Public and co-editor of www.lowdownnhs.info.