This move aims to streamline NHS governance, reduce bureaucracy, and cut administrative costs, with an expected 50% reduction in staff across NHS England and DHSC.
In this health update from NAVCA, we explore the main announcements and policy changes, as well as the risks, opportunities, and implications for the voluntary sector.
Main announcements and policy changes
Abolition of NHS England
- NHS England will be absorbed into DHSC over two years.
- The goal is to eliminate duplication between NHS England and DHSC.
- ICBs and local NHS leaders will have more autonomy, but the extent of this decentralisation remains unclear.
- Financial savings from reduced bureaucracy will be redirected to frontline services, though concerns remain about the potential impact on service delivery.
Financial pressures and cost-cutting
- The NHS inherited a £6.6bn financial gap and must make significant savings.
- Julian Kelly, NHS England’s Chief Financial Officer, stated that ICBs and NHS England must cut their workforce by 50%, equating to over 12,500 job losses and a saving approximately £400 million annually.
- In the House of Commons debate on 13th March, Wes Streeting confirmed there would be 50% staff cuts across DHSC and NHSE.
- The government insists that cuts will focus on administration, not frontline services, but concerns persist about reduced capacity to engage with the VCSE sector.
Decentralisation and ICS role
- The government aims to devolve more power to local NHS leaders and frontline staff, ending “micromanagement” from the centre.
- ICBs and ICSs will play a more autonomous role, but concerns were raised about whether these changes will genuinely empower local systems or create more central control under DHSC.
- There is a commitment to shifting NHS resources from hospitals to community care and prevention.
Workforce and NHS leadership changes
- A new transformation team, led by Sir Jim Mackey, will oversee reforms.
- NHS England’s current leadership, including CEO Amanda Pritchard, will be stepping down at the end of March.
- A focus on stronger clinical leadership was emphasised, with new medical directors for primary and secondary care.
Concerns raised by MPs
- Job losses: Uncertainty about how many NHS England staff will be absorbed into DHSC or made redundant.
- Implementation risks: Warnings that this top-down reform could distract from immediate service delivery needs.
- Funding for ICSs and ICBs: Fears that financial pressures will lead to cuts in local services, particularly in primary care and social care.
Impact on the VCSE sector and ICS-VCSE Alliances: Risks, opportunities, and implications
The restructuring of NHS England and ICB workforce reductions present both risks and opportunities for the VCSE sector. While the government has highlighted the importance of prevention and community care, there was no direct mention of the VCSE sector’s role, raising concerns about how these changes might affect engagement, funding, and partnerships.
Key risks:
- Reduced engagement with VCSE organisations: With ICBs cutting 50% of their workforce, their capacity to collaborate with the VCSE sector and Alliances may decline, making it harder for community organisations to influence local decision-making.
- Funding pressures and service cuts: ICBs are under significant financial strain, and cost-cutting measures could reduce investment in VCSE-led services, despite the sector’s vital role in addressing the wider determinants of health (SDOH) and improving healthy life expectancy. This presents a critical challenge for the entire VCSE sector, requiring a collective effort to ensure our contributions are recognised and resourced.
- Shifting priorities and potential marginalisation: The restructuring may result in statutory services dominating decision-making, undermining VCSE engagement within ICSs unless strong advocacy efforts are made.
Opportunities for the VCSE sector:
- Deeper partnerships with local decision-makers: If decentralisation empowers local ICBs, this could create opportunities for the VCSE sector to play a greater role in designing and delivering health and care solutions. NAVCA and ICS-VCSE Alliances should actively engage with ICBs to ensure community-led approaches are embedded.
- Alignment with NHS priorities: The government’s focus on prevention and community care closely aligns with VCSE expertise. This presents an opportunity for new partnerships and funding, but only if the sector remains actively engaged in shaping these transitions.
- Strengthened VCSE leadership: With the NHS shifting resources away from hospitals, VCSE-led services could play a more prominent role in community-based health and social care—if partnerships and funding frameworks support this shift.
Implications for NAVCA members and ICS-VCSE Alliances
While ICBs and the VCSE sector both face limited room for maneuvre, proactive engagement remains essential. LIOs and ICS-VCSE Alliances should play a key role in ensuring that VCSE representation and community perspectives are embedded in decision-making, and that the shift towards prevention and community-based care is properly resourced.
Next steps for action:
- Continue efforts to ensure that the VCSE sector remains a core partner in health and care decision-making, despite the challenges posed by top-down system changes.
- Strengthen partnerships with ICB colleagues to maintain collaborative working relationships and amplify the sector’s role in system transformation.
- Continue to make the case for the co-benefits of investing in the VCSE, emphasising its contribution to improved health outcomes and more sustainable care models.
If you have any questions, feedback or concerns, please email us on helpline@valonline.org.uk