Reform transition cost now £1.49bn, according to DH figure

The figure was included in a costing of the department’s “major projects” published alongside its 2011-12 business plan this week.

HSJ understands it represents the DH’s most recent estimate of the full cost of structural changes under the reforms, including at the department itself and in the NHS.

The cost of the government’s reforms - particularly payments to staff leaving their job - has been questioned by opposition MPs in recent months.

The impact assessment released when the Health Bill was first published in January estimated the total cost of the structural change to be £1.33bn. The department has said the benefits of the changes will “far outweigh” the costs. The original impact assessment estimated the financial benefit of the structural change at £11.37bn - mostly down to reduced “administrative” spend.

The department has said it is working on a new impact assessment following the government’s changes to the bill, made following a major review of the policy. It means the estimate may change again.

Analysis by HSJ this week shows the commissioning transition had cost at least £228m since July 2010, if expenditure on staff departures is included.

HSJ has also reported evidence throwing into doubt health secretary Andrew Lansley’s claim that there is no international data showing the NHS has relatively low management costs.

Meanwhile, information published with the business plans also reveals the DH is currently unable to measure one of the 12 “input indicators” meant to show how it is performing.

It says the latest figure available for the indicator - the unit cost of a GP consultation - is from 2008-09, when the cost was £23.51, because there is no arrangement to measure the number of GP consultations.

The document Impact and Input Indicators Measurement says: “There is currently no data being collected on GP consultations. Therefore, we are not able to update the metric on price per GP consultation from that shown here.”

It says: “Going forward there is no contract in place to collect the data, and options are being explored to remedy this.”