NHS England has an “unfunded cost pressure” for 2014-15, which sources have linked to a large-scale redundancy programme it failed to finish last year.

The lay-offs, understood to run into the hundreds, are being imposed as part of  a major back office restructuring at the agency.

The redundancies will affect NHS England’s primary care support services and two options for restructuring are up for debate at its May board meeting.

One would see the function outsourced with some roles transferred to India.

Under the second proposal, the functions would remain within NHS England but would be radically stripped back and centralised.

The organisation is seeking to slash the bill for these services in two, from the £100m current cost to £54.1m.

Both options would involve cutting several hundred jobs out of the 1,600 primary care support staff it currently employs.

The support service functions include: support for screening programmes; the maintainance of population databases; and the coordination of charges for prescriptions and optician and dental services.

These functions – formerly known as “family health services” – were transferred to NHS England when primary care trusts were abolished in April 2013.

They were not significantly reorganised in the transition but “lifted and shifted”, effectively keeping them intact and in their previous configuration.

While NHS England originally intended to restructure primary care support services during 2013-14, the changes are not expected to be completed until September 2014.

The agency set aside £130m in 2013-14 as a “transition fund” to cover restructuring costs, the most significant element of which related to primary care support service redundancies.

But according to NHS England’s risk register last month,  the way these redundancies would be funded was “still to be clarified”.

Its January’s finance report shows a £141m unplanned surplus in running costs, and a December board paper on financial allocations refers to a £140m bill for “transition costs” in 2013-14 for which it had “no external funding”.

This transition funding “will need to be found from savings elsewhere,” the December paper states.

Despite HSJ’s repeated requests for an explanation, NHS England has not said whether the transition funding for primary care support was ever spent or whether it has been rolled in 2014-15.

However one senior figure said the primary care support redundancies were now seen as an “unfunded cost pressure in the NHS England administration budget”.

A discussion about the way the proposed lay-offs would be funded is slated for a private session of the the organisation’s May board meeting.

 

Option 1: Outsource

The lay-off could be funded by using an outsource provider, according to one senior NHS England source. Although this would allow redundancy costs to be built into the contract, it could represent a worse deal for the taxpayer in the long term.

Under one outsource proposal under consideration by NHS England, Shared Services Connected would become the provider of primary care support services across England. The firm is a joint venture between the Cabinet Office and IT support company Steria. It proposes to subcontract the service to NHS Shared Business Services, a joint venture between Steria and the DH.

The NHS SBS already hold a small number of local primary care support services contracts and employs 500 staff in India, including 21 primary care support service jobs already outsourced via NHS SBS.

Under the SSCL plan, another 42 jobs would go to that office. A further 49 jobs would be outsourced to a company called Crown.

Overall, a net total of 837 whole time equivalent jobs would be cut. The hardest hit region would be the north of England, where two thirds of the workforce, or 441 WTE roles, would be lost.

Option 2: Restructure in house.

Under this proposal, NHS England would retain primary care support, but would still need to make 674 WTE redundancies, affecting up to 900 people.

The services would be organised on the same footprint as NHS England’s regional teams.

More posts would be retained in the north than under the SSCL proposals but would involve 402 WTE redundancies in London and the south.

The 38 offices currently providing primary care support services would reduce to 13.