Editor's blog Thursday 8th September 2011: DH publishes revised Health Bill impact assessment

The DH has published the revised Health Bill impact assessment.


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The original impact assessment published in January calculated that the reforms would save £5.195 billion over five years. This updated version now estimates that costs will be £706 million lower, at £4.489 billion.

The extended life of SHAs to April 2013 (originally April 2012) means that most of the savings will now come in the final years of the transition. The reprieve for SHAs, which will merge this October from the current 10 to four, will cost another £100 million. The revised document states that last financial year (2010-11), “the NHS went further and faster with reductions in staff numbers than was anticipated”. This led to reduction in the anticipated costs of back-office functions; partly because staff have been made redundant quicker than expected.

To date, £195 million has been spent on making staff redundant, and the impact assessment had modelled total spending of £989 million on redundancies for around 12,900 staff. The revised assessment expects to see 2,900 redundancies by 2014-15 among staff in PCTs, SHAs, arm’s length bodies and the DH: the previous draft had the figure 8,000 higher. This was partly due to previous over-estimation of admin staff numbers and also because redundancies will now be staged more gradually until 2015, meaning that job changes and retirements will reduce the number.

The summer’s changes to the Health Bill have slightly reduced the cost of the transition, down to £1.2-£1.3 billion from the anticipated £1.4 billion.