NAO report on NHS waste

July 11, 2013 10:54 AM

A new report from the National Audit Office shows that the NHS has spent an eye-watering £435 million in redundancy payments as a result of the Health and Social Care Act which came into force April of this year. As part of the new reforms, 10,000 full-time employees have left their jobs at an average cost of over £43,000 each.

Hundreds of those workers whose positions were made redundant received severance packages of over £200,000, with one high-ranking manager receiving a package of nearly £580,000. 

However, more than one in five of those that have been laid off walked back in to new positions within the NHS – some after a mere four weeks – meaning some could walk through a lucrative revolving door. 

Our Bumper Book of Government Waste* uncovered similar cases. For example, Newcastle Council spent £1.1 million on making 55 members of staff redundant, only to subsequently rehire them. This happened in Stoke-on-Trent Council as well, with £330,000 being spent on severance packages, with these same employees once again being rehired. We also showed this to be the case at the regulator Ofcom.

The NHS budget has been protected, but it’s clear that there are plenty of savings to be made. And it’s not restricted to huge payouts. 

For example, our Bumper Book highlighted an annual £666 million bill spent on locum doctors due to increased regulations on doctors’ weekly work hours and centralised pay bargaining. As locum doctors are more expensive and more difficult to schedule, reforming the system to minimise their use would certainly be helpful in the fight to reduce waste. 

Other huge waste items include £1.2 billion lost as a result of NHS clinical negligence, £972 million in excess staff sickness days and £150 million in unused prescriptions. More must be done to cut out this waste and focus resources on patient care.

The NAO report has highlighted an expensive revolving door culture within the NHS but it’s just one area in which the organisation wastes taxpayers’ cash.  


*updated to link to newer version

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