NHS under fire over redundancy payments

by Direct 2 Lawyers on August 26, 2013

The NHS came under fire over the weekend over the nature of redundancy payments it has made to executives in the past year, as it was revealed by the Department of Health it had spent more than £1 billion on redundancy payouts ove r the last 3 years.

The Department of Health released its annual report earlier this month and the figures relating to redundancy stem from that report. The report indicates that between April 2010 and March 2013, the NHS spent a total of £1.4 billion on redundancy payments for 32,089 staff, with the average redundancy package approximating to more than £43,000. The Government, which emphasized before the last elections that it would not make any more “pointless and disruptive reorganisations”, has been criticized for the number of redundancies that have been made and the cost to the taxpayer of making such redundancies.

As well as the redundancies themselves, the nature of the payments to NHS executives in the report was also heavily scrutinised. It was revealed that almost 1,000 health workers received six-figure exit packages in the last year, with 157 of these staff receiving more than £200,000. One of the NHS executives who received these large redundancy packages was Mr Nicholas Hick, who – according to The Telegraph – received a payment of approximately £600,000 four months ago.

The headlines relating to redundancy payments in the NHS come in the wake of recent similar headlines involving the Serious Fraud Office, the civil service and the Financial Services Authority, which were all criticized for the nature of the payments made to senior figures in these organisations. It was reported that the Government’s chief auditor refused to sign off the Serious Fraud Office’s accounts over the nature of the redundancy payment made to one outgoing senior figure. To make matters worse for the Government, a National Audit Office (NAO) report last month found that more one in five of NHS staff made redundant as part of the Government’s reforms had been re-employed by the health service

Andy Burnham, the shadow health secretary, stated: “Billions have been siphoned out of the NHS front-line to pay for an unnecessary re-structuring no-one voted for and David Cameron personally promised would not happen. At a time when the NHS needs every penny it can get, we have a Prime Minister handing out gold-plated, six-figure pay-offs to hundreds of managers and P45s to thousands of nurses.”

However, a Government spokesman stated yesterday that: “The changes made as a result of the reforms mean a huge net gain for the taxpayer. They will save £5.5 billion during this Parliament and £1.5 billion every year thereafter, to be reinvested back into patient care.”

Chris Hadrill, a solicitor at Redmans employment law solicitors, commented: “The value and nature of the redundancy payments in the NHS may seem, at first glance, to be huge but then again the NHS is a huge organisation. It’s important that the headlines be balanced against the fact that if there is a need for redundancies – which itself seems to be disputed – then the NHS needs to respect its contractual and statutory obligations towards its staff.”

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