Published: 27/05/2004, Volume II4, No. 5907 Page 6 7

The Department of Health is considering whether to reinvent some arm's-length bodies as community-interest companies under the proposed new Companies Bill, as part of its cost-cutting review.

Under the proposals some of the agencies would be set up as notfor-profit public limited companies and report to an independent regulator on how their work would benefit the community.

Health secretary John Reid announced last week that the DoH is to reduce the number of its arm's-length bodies by half in the ongoing review intended to reduce NHS bureaucracy.

Mr Reid said that by 2007-08 the number of NHS agencies would be reduced to 21 from the current 42.

He added: 'Changes on this scale would mean that considerable extra resources could be redeployed on the ground. The next stage of the review will involve consulting with the individual bodies on proposals for merger, rationalisation or abolition.'

Mr Reid confirmed that a final outcome would be announced in the summer.

Chief executives of arm's-length bodies have received a letter from the DoH informing them that DoH officials will be conducting visits in the next two weeks to discuss where and how the cuts will be made. Fourteen hundred civil servants' posts have already been cut from central DoH offices.

Mr Reid said of the cuts: 'It is important that this shift in the balance of power away from Whitehall to patients and frontline staff in the regions is carried out across the NHS.'

The DoH is expecting to save£500m in the review, with more than 5,000 jobs going through 'natural wastage and redundancy'.

HSJ understands that agencies likely to face cutbacks or mergers with other bodies include the Prescription Pricing Authority, the NHS Litigation Authority, the National B lood Authority, and the NHS Information Authority.

The cull of managers will create a pool of managerial talent that could benefit other NHS organisations. A DoH spokesperson admitted that many of the staff could go on to work for primary care trusts and strategic health authorities.

NHS Alliance chair Dr Michael Dixon said there were 'some very talented people in some of the bodies who PCTs would welcome with open arms'.

However, he warned that PCTs should not be seen 'as a safe refuge' and added that it was time to 'stop glamourising the backroom roles and transfer people to the front line'.

NHS Confederation policy director Nigel Edwards said that attempts to rationalise the NHS should be supported, but warned that the review must not 'throw the baby out with the bathwater... the government must get the transfer right rather than just demonstrating it can be tough on waste'.

lA study by the NHS Confederation has found that there is growing concern among senior NHS managers that patient forums are not working well.

The confederation said that the review of arm's-length bodies is an opportunity to look at national support for patient and public involvement under the Commission for Patient and Public Involvement in Health.

The body is charged with establishing patient forums, and is also one of the organisations under review.

Confederation policy director Nigel Edwards said: 'Our members have raised concern about the new patient and public involvement structures. We need greater national support for patient forums'.

A CPPIH spokesperson said the confederation's report was 'gossip not research'.