The NHS Counter Fraud and Security Management Service is to be reorganised in to a body called “NHS Protect” with up to 20 redundancies expected, HSJ has learned.

An internal consultation document marked “confidential” and seen by HSJ outlines the plan to restructure the division of the Business Services Authority so that it has “a greater reliance on local NHS anti-fraud resources”.

The paper, dated 5 November 2010, said that 81 posts would be deleted. The arm’s length body currently has 20 vacancies and 54 new posts are being created. It was estimated that the proposals would lead to 15 to 20 redundancies.

NHS Counter Fraud investigates and prosecutes claims of fraud against the NHS while Security Management Services protects the staff and assets of the health service. The division’s budget was £14.5m and almost £2.7m was recovered from fraud in 2009-10.

The document says the recommendations would be fully implemented by April 2011.

In response to a Parliamentary question this week health minister Earl Howe said: “The underlying principle is to ensure that, within the available budget, NHS Protect is able to respond to the changing needs of the NHS.”

Former Labour health minister Lord Hunt, who was responsible for NHS counter fraud, praised the work of NHS Counter Fraud, but said the restructuring plan would reduce capacity to tackle fraud centrally.

He told HSJ: “There is a strong need for a central capacity that can provide operational support, but also develop good procedures [to prevent fraud]”.

The plans involve the closure or downsizing of six regional bases, including a training centre in Reading, opened in 1999. The consultation said that training “could be delivered at reduced cost” and said it would “be delivered from one centre of excellence in Coventry”.

Lord Hunt said this meant the move “may not be cost effective”.

He said: “It [tackling NHS fraud] is quite a specialised task and if you are employed by an individual trust you can remain isolated so central training and development is important.”