Cost of NHS changes rising by £1m a day, official figures show

Price of NHS reforms soaring out of control says Labour as new total put at £1.49bn – up £160m in six months The cost of the government’s plans to restructure the NHS is rising at almost £1m a day, the Guardian has learned. Buried in a spreadsheet put out by the Department of Health as part of its revised business plan last week, officials admitted that the cost of transition was now £1.49bn. This figure is £160m more than the previous estimate, issued six months ago, when the reforms bill was first published. In January the department estimated the total cost of the structural change to be £1.33bn. The health bill was amended after suggestions by a committee set up by David Cameron, the Future Forum, to head off criticism over the wide-ranging reforms. But the effect appears to have been to increase significantly the cost of the upheaval to the taxpayer. A new impact assessment will now be completed by the Department of Health following the forum’s recommendations. Analysis by the Health Service Journal has shown that the transition to placing health budgets in the hands of GPs had already cost £228m since July last year. The size, scale and cost of the reforms have long troubled MPs and health service professionals, who point out that cutting staff also costs huge sums in redundancy payments. Trade unions claim that three-quarters of the estimated cost of the transition will go towards redundancy payments to 20,000 staff, suggesting average settlements of more than £45,000. John Healey, the shadow health secretary, said: “People will be shocked at the scale of wasted cost due to David Cameron’s NHS upheaval. These new figures, slipped out by the Department of Health, show that the costs of this unnecessary reorganisation are spiralling out of control.” Alan Maynard, professor of health economics at York University, said: “The delays and time taken for the reforms have really begun to affect morale and work ethic. People just won’t work if they don’t know where they will be next year or whether they have a job.” The department said the benefits of the changes will “far outweigh” the costs. The Co-operation and Competition Panel (CCP), the government body that investigates competition issues in the NHS, says that patients are losing out as a result of restrictions on their choice of provider of NHS care. An investigation found that nearly half of the NHS’s primary care trusts were blocking competition by guaranteeing NHS providers set amounts of work before patients can be sent to the private sector, or restricting the number of services that private hospitals can offer. The panel said that the expected benefits of patient choice – to patients and taxpayers – will not be fully realised. Trusts are also rationing procedures to cut costs. A freedom of information request by the health service GP magazine has found that, out of a survey of 111 PCTs, two-thirds are rationing “non-urgent” treatments such as tonsillectomies, cataract surgery and hip replacements. The issue of competition in the NHS is explosive. A controversial study by academics at the London School of Economics claims almost 1,000 lives were saved by the NHS being subject to competition. But Allyson Pollock, professor of public health research and policy at Queen Mary, University of London, said the study was “fundamentally flawed”. The paper, written by Zack Cooper, of the London School of Economics, and quoted by the prime minister last month, showed patients with more choice of hospitals had lower death rates. Cooper found that mortality rates of patients with heart disease fell faster in the more “competitive areas of England”. Thus the academics estimate that the reforms led to relative reduction of about 900, or around 7%, in heart attack deaths in the English NHS between 2006 and 2008. NHS Health Public finance Randeep Ramesh guardian.co.uk

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