NHS Redundancies to Proceed After Treasury Agrees Overspend Deal

Approximately 18,000 administrative and managerial positions within England’s National Health Service are set to be eliminated following an agreement between health officials and the Treasury regarding funding for severance packages.

The workforce reduction, announced by the government earlier this year, will primarily affect administrative and managerial roles. As part of broader structural changes, NHS England—the organization responsible for overseeing the health service—will be integrated into the Department of Health and Social Care, while local health boards will also face budget reductions.

Negotiations between NHS leadership and health ministers with Treasury officials centred on financing the estimated £1 billion in one-time costs associated with the redundancies. While health service officials initially sought additional funding, the Treasury rejected that approach. Sources familiar with the matter indicate a compromise has been reached allowing the NHS to exceed its budget this year to cover the costs.

The arrangement is described as a “pragmatic step” by officials, who note that the job cuts will generate savings in subsequent years. The NHS will be required to offset the initial overspending through those future savings.

Government sources emphasize that no additional funding beyond what was allocated during this year’s spending review will be provided to the health service. That review approved an increase of £29 billion annually above inflation by the 2028-29 fiscal year.

Health Secretary Wes Streeting defended the restructuring during a morning broadcast interview, stating that feedback from both patients and NHS employees indicated concerns about excessive bureaucratic layers within the organization.

“People want to see the front line prioritised, and that is exactly what we’re doing,” Streeting explained, noting he would communicate to NHS leadership that the health service is “finally on the road to recovery” during an address on Wednesday.

Speaking at the NHS Providers’ conference in Manchester, Streeting is scheduled to emphasize fiscal responsibility while outlining the government’s vision for redirecting resources.

“I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely,” he is expected to say. “We’re now pushing down on the accelerator and slashing unnecessary bureaucracy, to reinvest the savings in front-line care.”
Government officials project the reforms will generate £1 billion in annual savings by the end of the current parliamentary term, with those funds designated for patient service improvements.

According to government calculations, each billion pounds saved from administrative costs could fund approximately 116,000 additional hip and knee surgical procedures.
Streeting is expected to acknowledge that transformation will require time, stating: “It won’t happen overnight, but with our investment and modernisation, we will rebuild our NHS so it is there for you when you need it once again.”

BMA chair of council Dr Tom Dolphin said: “The Secretary of State plans to save large sums of money from reducing bureaucracy, but we are concerned about the effect of losing many roles at once from NHS England on the ‘shift to prevention’, especially in public health and planning, and the impact on all staff losing their livelihoods.

“To suggest these projected savings could fund an extra 116,000 hip and knee operations may well be the case, but we do not have enough surgeons, anaesthetists and other theatre staff, or operating space fit for purpose, to meet existing demand. We need to see the money spent filling gaps on rotas, creating much-needed training jobs for resident doctors, and restoring the value of staff salaries to show that our worth is recognised. And let’s not forget the NHS maintenance backlog standing at nearly £16 billion, with many hospitals struggling with unsafe, outdated buildings. We hope the Health Secretary will recognise that investment in staff, training and buildings and equipment is needed if the savings he is talking of are to truly translate into improved patient care

“The BMA will always stand up for a health service that is safe for patients and safe for staff. That means improving pay, training and working conditions so we can retain and recruit the doctors needed to deliver timely, high-quality care. We share the Health Secretary’s desire to see the money spent wisely, and look forward to discussing what wisely looks like.”