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The Telegraph NHS spends £12 million making new recruits redundant

  • 19.09.2014
  • Laura Donnelly, Health Correspondent

NHS accused of 'scandalous waste' after new body spends £12 million on redundancy packages for 300 officials.

An NHS body which was set up to “streamline bureaucracy” has spent £12 million on redundancy packages for hundreds of staff who were only hired in the last two years.

More than 300 officials employed by NHS England have received payments of up to £280,000 after the new body axed staff who had only been recently been recruited.

Last night critics accused health officials of presiding over “scandalous waste,” creating a “merry-go-round” among NHS managers, with some receiving generous redundancy deals, only to be rehired.

It comes as the head of the health service prepares to announce hundreds more redundancies, with millions more set to be spent on “exit packages” by an organisation which only launched last year.

The body, which was set up under a Coalition pledge to reduce spending on NHS bureaucracy, has previously been criticised for taking on 6,000 employees, including 280 on six-figure salaries.

Now official accounts disclose that the organisation spent £11.37 million on exit packages for 312 staff during 2013/14 - including 20 employees who received at least £100,000 each.

Nine of the employees received a package of at least £150,000, with one payment of £280,000, even though the organisation was only officially launched last year.

NHS England said some of the sums – including the highest payment - were “legacy payments” paid to staff who had worked at bodies abolished in the 2012 restructuring.

In other cases, payments went to those who were recruited to help the new system “settle down”, a spokesman said.

Katherine Murphy, chief executive of the Patients Association, said the charity was appalled by the use of taxpayers’ money.

She said: “Many of these managers in high-salaried posts will have already had a significant pay-out from the NHS, whether their impact was positive or negative.

“This money would have been better invested in front-line staff and in improving patient care. We must remember that the NHS is paid for by the tax-payer, and it belongs to patients and the public.”

NHS England was set up as part of a controversial 2012 restructuring of the health service, which saw 38,000 NHS employees receive redundancy packages - of whom 4,000 were later rehired. They included a married couple who received £1m in redundancy payments – only to be taken on elsewhere in the NHS.

Earlier this year, a new chief executive, Simon Stevens was appointed to lead NHS England, replacing Sir David Nicholson, who retired after being criticised for his part in the Mid-Staffs scandal.

Mr Stevens, who took a pay cut on taking the role, has vowed to reduce the body's running costs by 15 per cent - which is expected to mean hundreds more redundancies.

Consultation on the next round of job cuts will start next month.

Last night Julia Manning, chief executive of think tank 2020Health, said the NHS was now spending millions of pounds it could ill-afford, because the new organisation had been set up so badly.

She said: “All this scandalous waste of millions on redundancy, recruitment and now redundancy again stems from the coalition government panicking and keeping the last NHS chief executive in place instead of appointing someone to NHS England from the start with a long-term vision.”

Andy Burnham, Shadow Health Secretary said: "The scale of this Government's mismanagement of the NHS gets more staggering by the day.

"This is the NHS re-organisation that never ends. It is a colossal waste on bureaucracy when all of the money should have been spent on patient care."

Mr Stevens, who took a voluntary £20,000 pay cut when he became NHS chief executive in April has pledged to clamp down on the organisation’s spending.

In May he ordered a ban on first-class travel after expenses claims revealed that nine of the most senior health officials spent almost £200,000 last year on fine dining, taxi fares and hotels at up to £500 a night.

A spokesman for NHS England said: "These are redundancy payments relating to the creation of the current NHS system after the 2012 Health and Social Care Act.

“Some of the cost is made up of legacy payments, relating to former staff of primary care trusts and strategic health authorities Others relate to organisational restructure after April 1 as the new system settled down. For example, two thirds of the redundancies relate to commissioning support units (CSUs) seeking to cut running costs, and there were also three CSU mergers and one closure during the year,” he said.