Published: 02/12/2004, Volume II4, No. 5934 Page 7

Dorset and Somerset strategic health authority chief executive Sir Ian Carruthers has been appointed to oversee the creation of a new NHS Institute for Learning, Skills and Innovation to replace the NHSU and the Modernisation Agency by July next year.

The move - which will see a combined staff headcount slashed from 1,500 to 300 - comes just a year after NHSU was launched as a special health authority to deliver learning programmes for NHS non-medical staff.

NHSU director Professor Sir Bob Fryer, appointed vice-chancellor designate of the so-called university for the NHS, will now join the ranks of Department of Health 'czars' as national director for widening participation in learning.

The decision on the future of the two bodies was announced this week as part of the government's arm'slength bodies review 'implementation framework'. This sets out an operational plan to back up this summer's proposals to slash the number of bodies from 38 to 20, saving£500m and cutting 25 per cent of staff by 2008, published in the summer.

The government confirmed it will abolish the 21 controls assurance standards following a joint DoH and Cabinet Office review, which it claims will contribute to freeing over 350 frontline staff from 'the burden of collating and reporting information'.

Arm's-length bodies are expected to save a total of£250m in operating costs and generate 'at least'£250m in 'efficiencies' to hit the government's arm's-length body review savings target. They are expected to achieve these by reducing duplication on inspection and regulation activities; 'recovering costs' of any regulation of private and independent providers; sharing human resources and finance backoffice functions; and relocating posts from London and the South East.

Junior health minister Lord Warner, who chaired the review, said: 'There have been some signs of reluctance to engage with this agenda. We mean serious business.

Part of the reason for [this framework] is to make clear there is a timetable for change, that this is not a phoney process or an exercise in spin. There will be a very tough budgeting process for 2005-06 and that is how we will set our agenda.'