NHS Estates to undergo big cuts

NHS Estates is to be rationalised under a swingeing cull of the Department of Health's (DoH) arms length bodies (ALBs).

The move has been prompted by Sir Peter Gershon's drive to increase public sector efficiency and the DoH's own plans to cut bureaucracy by concentrating resources on frontline NHS services and social care.

Health minister John Reid set out the findings of the first stage of the DoH review of its ALBs last week. He announced that:

*There are too many overlapping and duplicated functions.

*There are some unnecessary regulatory and policy
activities.

*Back-office functions such as human resources, finance, IT and estates could be
rationalised.

*Many bodies could be merged, thus reducing overheads and integrating similar functions.

*Some bodies could be given independent status, with greater stakeholder control.

Reid announced that by 2007/08 there will be: a 50% reduction in the number of ALBs; expenditure savings of £500m; and a 25% reduction in headcount.

The review covers 42 separate arms length bodies employing more than 22,000 staff. The combined annual budget is currently more than £2.5bn.

He added: "The next stage of the review will involve consulting with individual bodies on proposals for merger, rationalisation or abolition. This should be completed by the end of June, so that the final outcome can be announced before the summer recess."