Health Secretary Wes Streeting has made a significant announcement regarding thousands of redundancies across the NHS, confirming that a funding settlement has been reached for a “50 per cent reduction in headcount” across NHS England and Integrated Care Boards (ICBs). This decision follows months of uncertainty, particularly for the 1,600-strong NHS workforce in Greater Manchester, where 600 employees of the Greater Manchester Integrated Care Board were facing redundancy amidst deep government-demanded cuts and a previous refusal to approve a redundancy scheme.

The financial backing for these mass layoffs has been a point of contention. Chancellor Rachel Reeves ultimately rebuffed Streeting’s plea for an emergency £1 billion injection into the NHS’s budget. Instead, the Treasury has permitted the Department of Health and Social Care (DHSC) to overspend its allotted budget by approximately £1 billion this financial year, under the condition that it will receive less money in 2026-27, meaning no new cash overall. This £1 billion is earmarked to cover the payoff costs for the estimated 18,000 personnel who are losing their jobs across the 42 regional ICBs, as well as an unknown number of employees at NHS England, which is slated for abolition and merger with the DHSC by 2027.

The restructuring is radical, aiming to cut around half of the 25,000 staff currently working across the country’s 42 regional health boards. For instance, NHS Greater Manchester Integrated Care Board was directed to cut its costs by 39 percent, translating to a £41 million saving from its £106 million staff budget. The broader goal is to create “leaner organisations, with half their current posts removed,” as stated by the DHSC, with the reforms expected to abolish approximately 18,000 administrative posts and save more than £1 billion that will be redirected to frontline patient care.

For months, the lack of clarity surrounding the job losses – including which jobs, when they might be lost, and who would cover the costs – created an “incredibly uncertain” and “Kafka-esque” situation for staff and their families. The process had effectively ground to a halt due to disagreements over funding. Union representatives, such as Jon Restell of Managers in Partnership, highlighted the “avoidable distress” caused by this inaction, placing care board leaders in an “intolerable position.”

Addressing the NHS Providers Conference in Manchester, Streeting confirmed that the funding arrangements for the care board redundancy program have finally been agreed with HM Treasury. He reiterated that the government would not be cutting any investment in the NHS, whether frontline or backroom services. He also asserted that the abolition of 18,000 administrative posts is part of a broader strategy of “stripping away endless red tape and bureaucracy,” which is projected to save the NHS £1 billion a year by 2029.

Streeting also outlined broader governmental successes and commitments, stating: “The government is protecting investment in the NHS at the Budget, worth an extra £29 billion to the health service.” He cited achievements like cutting waiting lists, recruiting 2,500 more GPs, and reducing ambulance waits for critical conditions. He emphasized that investment in extended services, modern technology, and improved staff retention is working, with productivity growing by 2.4 percent due to cuts in wasteful spending, like on recruitment agencies. He pledged to “rebuild our NHS so it is there for you when you need it once again.”

Despite the official reassurances, health leaders expressed mixed feelings. Sir Richard Leese, chair of NHS Greater Manchester Integrated Care Board, expressed hope that the announcement would end the eight months of uncertainty for staff. However, he lamented the loss of “skilled and hard-working staff” but acknowledged that it should allow the full implementation of their new operating model. Jon Restell, while welcoming the end of funding uncertainty, voiced concerns about the fate of important care board functions and the potential loss of managers with crucial digital and planning expertise, which could undermine the government’s own 10-year health plan.

The current restructuring marks a significant policy shift, given that Streeting had previously ruled out such radical changes when Labour was in opposition. These job cuts also come amid broader financial pressures, including an unfunded request from NHS bosses for an additional £3 billion this year to cover redundancy costs, expenses from resident doctor strikes, and rising drug prices. The Treasury’s unagreed counter-offer to provide redundancy funding if the DHSC absorbed drug costs further underscores the complex financial landscape of the NHS.