£80m cost of NHS cuts

The NHS paid out more than £80 million in redundancy packages following the reorganisation of strategic health authorities, it was reported today.

More than 700 staff lost their jobs in last year's shake-up, which saw the number of SHAs reduced from 28 to 10.

Figures obtained by the BBC under the Freedom of Information Act revealed 764 people were made redundant or took early retirement at a cost of £82.89 million.

Among those were 61 senior managers whose redundancy packages cost an average of £358,355, according to the BBC.

One chief executive's early retirement deal reportedly cost his SHA £900,000.

A Department of Health spokeswoman said: "Inevitably there will be short-term costs as a result of reorganisation and it is right that NHS staff who are made redundant get what they are contractually and legally entitled to.

"However the long term benefits far outweigh any short term costs.

"By 2008 the NHS will make annual savings of at least £250m to plough back in to front line services as a result of the SHA and Primary Care Trust (PCT) mergers.

"These savings significantly outweigh the costs and could pay for, for example, roughly 50,000 heart operations."

Twenty-eight SHAs were set up in 2002 to co-ordinate care and deliver Government policy in England.

They were merged into 10 bodies in a drive to redirect £250 million into patient care.

Liberal Democrat health spokesman Norman Lamb said: "This is the price we're paying for botched reforms.

"The Government rushed into ill-thought-out reform. When the system didn't work they changed it."

Shadow Health Secretary Andrew Lansley said: "These are the kind of costs that result from endless reorganisations. Not one penny contributes to the health of patients."

There have also been reports of the redundancy packages offered to former heads of primary care trusts (PCT), which are overseen by SHAs.

In July, it was revealed that Chris Town received a package worth £480,000 - four times his salary as former boss of Greater Peterborough PCT.

The pay-off was made in December when the PCT was reconfigured.

At the time, Mr Town was interim chief executive at neighbouring Cambridgeshire PCT but was offered redundancy after failing to secure that permanent job or one at Peterborough.

Mr Town said most of the money had gone into his pension.

"I got a small redundancy sum of around £20,000 to £25,000 and the rest is in my pension," he said.

"I worked for 36 years in the NHS as a manager and my natural retirement would have been after 40 years.

"Therefore, they have paid into my pension the equivalent of what they would have paid me for the next four years.

"I worked all of my life for the NHS and had a contract that said if I was made redundant for whatever reason over the age of 50 I would get benefits like being able to get my pension early."

A spokeswoman for the Department of Health said today: "The Secretary of State has also made a commitment there will be no further centrally dictated, top-down restructuring to Primary Care Trusts and Strategic Health Authorities for the foreseeable future."