Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
Department lacks new mechanism to approve severance payments amidst large-scale NHS restructuring.
Recommendation
When the previous Committee reported on this in June 2022, it warned that that the (then planned) large–scale restructuring of commissioning within the NHS could increase the risk of further unapproved payments being made.38 Given the announcements about the restructuring of NHS England and the potential for large numbers of redundancies, we asked the Department whether it planned to introduce a new mechanism to approve these. Given the potential for many more unapproved payments being made due to the scale of the redundancies the enforcement of this mechanism needs to be carefully considered. The Department told us that this had yet to be decided, but that when it had run similar schemes, HM Treasury had approved the overarching business case for the overall numbers, cost and time of the people due to leave the organisation, and then processes had been set up inside the Department and NHS England to manage it and ensure that appropriate governance was in place. It told us that it “imagine[d] that … will happen again”.39 36 Qq 52–3, 55 37 Q 55 38 Committee of Public Accounts, Sixth Report of Session 2022–23, Department of Health and Social Care 2020–21 Annual Report and Accounts, HC 253, 18 May 2022 39 Qq 53–55 18 3 Transparency and accountability for the Department’s spending Usability of the Department’s Annual Report and Accounts document
Government Response Summary
The government agrees with the committee's recommendation, stating NHS England is redrafting guidance on exit packages and associated approval mechanisms. This new guidance, to be communicated by end of Summer 2025, aims to strengthen oversight during restructuring and potential redundancies.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation Target implementation date: end Summer 2025 6.2 NHS England is currently redrafting the guidance around exit packages and the associated approval mechanisms. This guidance will include instruction on all types of exit packages including voluntary severance, Mutually Agreed Resignation schemes (MARS), compulsory redundancies, and special severance cases. This guidance will be communicated via the regional workforce teams as well as via the NHS England external website. This should have an impact on exits agreed from 2025-26. 6.3 Where instances arise with compliance with the approval mechanism for exit packages, NHSE conducts a lesson-learnt exercise and reiterates the approval rules via several avenues. For example, NHSE directly liaises with the organisations involved to ensure the rules are understood, and through financial control events where NHSE promotes good practice and reminds delegates of the governance arrangements for certain types of transactions. So far for 2024-2025 NHSE has seen fewer instances of non-compliance, but the final assurance process on this is not fully complete as of May 2025. 6.4 Regarding the future arrangements for exit packages, the oversight mechanism will depend on where the legal powers reside after the integration of NHSE into the future Department of Health and Social Care. NHSE will ensure it is picked up in the transition process.