NHS chief executive quits over cash crisis

The financial crisis gripping the National Health Service has engulfed its chief executive, only a year after he was touted as a potential head of the Civil Service.

After months of pressure, Sir Nigel Crisp, 54, announced yesterday that he was taking early retirement from his post as head of the NHS and said he was "particularly saddened" by the financial problems in the health service.

Tony Blair paid tribute to his work and announced he would join the Lords as a crossbench peer and take on a new role as adviser to the Government on how British health expertise can aid developing countries.

Critics said Sir Nigel, who was appointed in November 2000, had been made a scapegoat and described his sudden departure as more akin to the world of football than Whitehall. Downing Street denied Sir Nigel was "carrying the can" for the NHS deficits and insisted his peerage was evidence of the high regard in which he is held.

Twelve months ago, with NHS waiting times falling rapidly, Sir Nigel was invited to apply for the post of Cabinet Secretary and head of the Civil Service, having demonstrated he could deliver public service reforms.

But in the past six months he has lost the confidence of ministers and senior managers as finances in some trusts spiralled out of control and the NHS headed for a record deficit, after five years of record growth. A projected £620m overspend last October had worsened to £790m by January and Sir Nigel admitted yesterday there was no chance it would be reduced to the target of £200m at the end of the financial year in three weeks' time.

His position was also weakened by a decision, later rescinded, to reorganise primary care trusts last July, which infuriated health service staff.

Sir Nigel's job, which has been split, will be temporarily filled by Sir Ian Carruthers, a career NHS manager who takes over as acting NHS chief executive, and Hugh Taylor, a senior health department civil servant, who becomes acting Permanent Secretary.

His rushed departure drew charges from the Opposition that the central NHS was in crisis. The shadow Health Secretary, Andrew Lansley, said: "The NHS is plunging into the red because ministers raised costs and pushed targets without regard to the overall impact on services. Chaotic upheaval has left managers at every level in despair."

Speaking to The Independent yesterday, Sir Nigel declined to apportion blame and insisted that as chief executive he was accountable for the problems. He said he was sad to be going but insisted that this was the "right time". He had had "five very good years" and "a bad six months".

When he took over the job, the question had been whether the NHS would survive. Now it was whether it was delivering value for money.