Source · Select Committees · Public Accounts Committee
Recommendation 26
26
Accepted
NHSE abolition announced alongside significant cost-cutting demands on Integrated Care Boards
Conclusion
On 13 March 2025, the Government announced that NHSE would be abolished within two years and that the Department would put in place arrangements to deliver the responsibilities currently delivered by NHSE.57 On the same day, as part of our evidence session on the 2023–24 Annual Report and Accounts of the Department for Health and Social Care, we asked the Department and NHSE about reports that Integrated Care Boards (ICBs) had been ordered to cut costs by 50%.58
Government Response Summary
The government agrees with the committee's observation regarding the abolishment of NHSE and the cost-cutting measures for ICBs, aiming for implementation by Spring 2026 and bringing forward £860 million to support upfront costs.
Government Response
Accepted
HM Government
Accepted
6.6 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2026 6.7 The department accepts the Committee’s recommendation and will deliver a modernised health system through the integration of NHS England into DHSC and the associated restructuring of Integrated Care Boards (ICBs). 6.8 The department is committed to transparent, responsible, evidence-based policy making. The government will publish proportionate assessments to support the scale of reforms, to enable scrutiny. 6.9 The department plans to publish an impact assessment to support the required primary legislation. This impact assessment will focus on legislative changes to enable the transfer of functions from NHS England to the centre, or wider system. 6.10 The department is developing the operating model for the new centre at pace, together with the plans for transfer of people, functions and responsibilities. These secondary policy decisions and impacts, related to headcount reductions or structural changes, will be considered separately to the impact of the legislative changes. The decisions will be made in slower time and are dependent on the end-state agreed in Parliament. 6.11 ICBs will focus on strategic commissioning and move to the new operating model described in the model ICB blueprint. 6.12 The department’s ambition is to halve headcount across DHSC, NHS England, and ICBs, by approximately 18,000 posts, saving over £1 billion annually by the end of Parliament. Further financial information will be disclosed in line with reporting and transparency commitments. 6.13 In the Autumn Budget 2025, the Chancellor announced that the Treasury would bring forward £860 million of the department’s Spending Review 2025 (SR25) settlement to support with the upfront costs.