Sir Keir Starmer has taken the axe to NHS England to free up more money for frontline services and bring management of the health service “back into democratic control”.
In a surprise move, the leader of the party which founded the NHS, announced he would abolish the independent quango which has run the health service for more than a decade, cutting up to 10,000 jobs.
Ministers said the plans would help deliver savings of hundreds of millions of pounds every year, which would be used to cut waiting times by slashing red tape to help speed up improvements in the health service.
The Tories welcomed the move with caution, warning Labour it had to deliver, while health bodies and unions said another reorganisation of the NHS risked diverting “time and energy” away from improving care for patients.
However, one former Tory health minister, James Bethell, tweeted: “I wish we'd had the guts to do this.”
The dramatic move comes just days after a mass exodus of people at the top of NHS England, including the shock resignation of its chief executive and medical director.
Announcing the reform, during a speech in Yorkshire on slimming down the civil service, Sir Keir pledged to go further and “cut bureaucracy across the state, focus government on the priorities of working people [and] shift money to the front line".
He said scrapping NHS England would “put the NHS back at the heart of government where it belongs, freeing it to focus on patients, less bureaucracy, with more money for nurses. An NHS refocused on cutting waiting times at your hospital".
And he added that it was far from the only “tough choice” he would make, promising: “In this era, they will keep on coming.”
Under the plans, which are set to begin now but could take up to two years to implement fully, NHS England, which the government described as the "world's largest quango", will be brought back under the Department of Health and Social Care.
Sir Keir said the body, created by the Tories a decade ago, had resulted in a huge amount of “duplication” at a time when waiting lists mean the NHS can least afford it.
He told his audience: "We're duplicating things that could be done once. If we strip that out, which is what we're doing today, that then allows us to free up that money.”
Health secretary Wes Streeting said the reform was the “final nail in the coffin” of the previous government’s “disastrous 2012 reorganisation, which had led to the longest waiting times, lowest patient satisfaction, and most expensive NHS in history”.
Around half of the 15,300 people who work for NHS England and 3,300 who work at the Department of Health are set to lose their jobs under the plan.
The boss of NHS England Sir James Mackey backed the change, although he admitted the announcement was “unsettling” for the organisation’s thousands of staff.
But health think tanks warned that another reorganisation of the NHS risked diverting and distracting staff from the job of improving the health service for patients.
Hugh Alderwick, director of policy at the Health Foundation think tank warned: “History tells us that rejigging NHS organisations is hugely distracting and rarely delivers the benefits politicians expect. Scrapping NHS England completely will cause disruption and divert time and energy of senior leaders at a time when attention should be focused on improving care for patients.”
Sarah Woolnough, chief executive of The King’s Fund, said the potential savings were a “minimal” part of the huge NHS budget, adding that “structural change comes with significant opportunity cost, with staff who would otherwise be spending their time trying to improve productivity, ensure safety, and get the best outcomes for patients, now worrying about whether they will have a job.”
Professor Nicola Ranger, general secretary and chief executive of the Royal College of Nursing, warned: “The chaotic reorganisation that created NHS England cost billions and took money and attention away from clinical care. Nobody can afford a repeat now that NHS performance is already at a historic low and money is scarce.”
That view was echoed by Prof Phil Banfield, chair of British Medical Association council, who said: "Doctors' experiences of reorganisations of the NHS have not been positive. This must not become a distraction from the crucial task that lies ahead”.
Union bosses hit out at the way the PM announced the job losses, with NHS England sources telling The Independentthey were given no notice at all and there were audible gasps in the office when the news broke.
Unison general secretary Christina McAnea said: “The way the news of the axing has been handled is nothing short of shambolic. It could surely have been managed in a more sympathetic way.”
Despite creating NHS England, the Tories appeared to cautiously welcomed its abolition.
Alex Burghart, the shadow chancellor of the Duchy of Lancaster, said: “We support measures to streamline NHS management and the principle of taking direct control.”
But he added: “Labour ministers now have nowhere to hide or anyone else to blame on NHS performance.”
The Liberal Democrats said the reform was a welcome move but it would not matter matter unless Mr Streeting “stops ignoring the elephant in the room” to reform social care to reducing the number of people stuck in hospital with no need to be there.
Last week, Professor Sir Stephen Powis, NHS England medical director, said he would stand down this summer, just a week after the surprise resignation of boss Amanda Pritchard, closely followed by three other senior managers.
