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Plans to abolish NHS England (NHSE) and merge its functions with the Department of Health and Social Care (DHSC) have created “great uncertainty for all involved,” a parliamentary report has warned.

The House of Commons Public Accounts Committee (PAC) raised concerns in its inquiry into the DHSC’s 2023-2024 accounts. The report questioned the impact of the proposed changes, particularly the significant staff cuts involved and the effect on patient care.

Streeting: Reform Will Cut Waste and Costs

Health Secretary Wes Streeting defended the plans when he gave evidence to the House of Commons Health and Social Care Select Committee in April. He said having “two head offices” led to “duplication, waste, inefficiency, contradiction, and the system being pulled in different directions.”

Streeting said the combined size of NHSE and the DHSC would shrink by around 50%. Integrated care boards would be expected to cut running costs by half, with savings diverted to patient care.

Committee: No Clear Plan

The PAC said the government had failed to explain how “this major structural and operational change” would affect key services and targets. 

Committee chair Sir Geoffrey Clifton-Brown MP said in a press release that after 2 months, the government had yet to articulate “a clear plan for what comes next.” The future for patients and staff “remains hazy,” he said.

Key areas where the government lacked clarity, according to the committee, included:

• How staff reductions would be achieved and costed.
• Where reductions would be made geographically.
• The scale of cuts to DHSC staff.
• How the plans align with the NHS’s 10-year strategy.
• How savings would support frontline care.
• How institutional knowledge at NHSE would be retained.

The report also criticised the DHSC for a lack of narrative in its accounts on social care, productivity, prevention, digital innovation, and end-of-life services.

DHSC Accepts ‘Serious Reform Needed’

Asked to comment by Medscape News UK, a DHSC spokesperson said, “Serious reform is needed to tackle the challenges facing the NHS.” Merging NHSE back into the department would eliminate wasteful duplication, free up money for frontline services, and “keep patients safe by overhauling the overly complex bureaucracy of healthcare regulation and oversight”.

Since the decision to abolish NHSE was taken, a joint board has been established, resources assessed, responsibilities mapped across affected organisations, and legislative planning begun. The spokesperson insisted that the current two-centre system “frustrates staff” with “too many checkers and not enough doers.” 

Health Security Programme Years Behind Schedule

The PAC also flagged failings at the UK Health Security Agency (UKHSA). Its planned new high-containment labs had been “poorly overseen,” with the project at least 15 years behind schedule and costs ballooning from £530 million to an “eye-watering” projected figure of £3.2 billion.

So far, £400 million has been spent “with little to show for it.” No final decision has been made about the site. The committee urged the UKHSA to set out how it will maintain lab capacity as current facilities reach the end of their lifespan.

Clinical Negligence Payouts Reach £58 Billion

The PAC also highlighted “jaw-dropping” amounts being paid out on clinical negligence claims, with an “astounding” £58.2 billion set aside for potential future claims. This is the second largest government liability after nuclear decommissioning, the report noted. 

Clifton-Brown said the figures “should give our entire society pause”. He urged the government to prioritise reducing avoidable patient harm.

Legal costs remain high, with £536 million — 19% of the £2.8 billion awarded to claimants in 2023-2024 — going to lawyers, on top of the fees charged by the government’s legal team. The PAC called for a plan with “clear actions to improve patient safety across the NHS, and in particular in maternity services.”

Call for Bold Reform

Dr Rob Hendry, chief member officer at the Medical Protection Society, said spiralling negligence costs divert vital resources from care and service improvements.

“The Public Accounts Committee is right to question whether such costs are sustainable for the NHS and whether such significant amounts of money should be spent on legal fees,” he told Medscape News UK. He noted that in lower value claims it was not unusual to see lawyers’ costs exceed the compensation awarded to claimants. “This is not right.”

Hendry added that high costs also affect healthcare professionals not covered by a state-backed indemnity scheme — such as dentists and private practitioners — who bear the cost of protecting themselves against claims. He called for a balance between fair compensation and financial sustainability, urging the government to pursue bold reforms without delay.

Dr Sheena Meredith is an established medical writer, editor, and consultant in healthcare communications, with extensive experience writing for medical professionals and the general public. She is qualified in medicine and in law and medical ethics.