NHS England is to cut hundreds of posts and is likely to carry out a major restructure of its 27 area teams over the next nine months.

The changes are a response to the organisation’s requirement to reduce its running costs by between 10-15 per cent in 2015-16. All changes need to be carried out by April next year.

The plans could become controversial if they are seen as a further NHS structural reorganisation, following the completion just last year of the major upheaval which created NHS England and clinical commissioning groups.

Simon Stevens

Simon Stevens is due to tell NHS England staff about the changes this morning

Controversy could also be sparked if the changes result in many large redundancy payments. The 2010-2013 restructure was accompanied by thousands of redundancies which cost more than £1bn and drew significant media attention.

NHS England chief executive Simon Stevens was due to inform staff of the need for changes this morning.

HSJ understands senior officials have discussed the potential need for 500-800 posts to go of NHS England’s total of around 5,500 full time equivalent staff.

The total reduction will be towards the smaller end of the range if cuts are focused on senior staff, as is likely according to some senior sources.

There are highly likely to be significant staff reductions in NHS England’s 27 area teams, as these account for many of its employees.

Several senior sources said this was very likely to mean extensive structural changes would be made to the area teams.

These have not been decided, but senior sources said directors were likely to be shared across groups of area teams.

At present the 24 area teams outside London each have six identical director posts.

In London there has been a more flexible approach since NHS England was fully established last year, with more senior staff employed at regional level and fewer in its three area teams.

London’s area teams have different structures with many more shared staff.

The changes due to be made by NHS England are likely to see its other regions operate more like London, HSJ was told.

HSJ understands senior figures in the organisation are keen to avoid large numbers of redundancies as the cost could be controversial in the run up to the May 2015 general election.

However, some senior sources said this may not be possible.

As well as facing a steep cut to the NHS administration spending allowance, which was announced in the 2013 comprehensive spending review, NHS England has in recent months been considering how it should change its structure to improve the way it works, a year after it took on its full powers.

UPDATE

NHS England has released to HSJ a statement from its chief executive Simon Stevens which was sent to staff today about the need for savings and structural change.

It confirmed some of the proposals under consideration.

It said: “By April 2015 we need to make savings of around £80m - or 15 per cent - of our running costs across NHS England.

“National directors have identified how they would do this across [national teams] and will be discussing their plans with their staff over the coming weeks.

“We have an outline plan for the field force in commissioning operations. We propose a much more integrated model across regions and areas outside of London so we avoid duplication and work more effectively across all parts of the organisation.

“This will obviously mean some change, especially to leadership arrangements, with area directors likely to oversee a larger geography, working more closely as part of the regional team, with each area director also taking on a national lead role for a specific topic.”

Read Simon Stevens’ note on the changes

Related files/tables