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MPs criticise £80m cost of SHA redundancy payments

24 August 2007

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The Conservatives and Liberal Democrats have attacked the reorganisation of strategic health authorities (SHAs) after it emerged the NHS paid out more than £80m in redundancy packages.

More than 700 workers were axed during a shake-up last year, in which the number of SHAs were cut from 28 to 10 in a bid to redirect £250m into patient care.

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

Among those were 61 senior managers, whose redundancy packages reportedly cost an average of £358,355.

Liberal Democrat health spokesman Norman Lamb said: “This is the price we’re paying for botched reforms.”

And 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.”

But 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.

“By 2008, the NHS will make annual savings of at least £250m to plough back in to frontline 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.”

Copyright © PA Business 2007

Department of Health