Keir Starmer dramatically axed NHS England today with up to 10,000 jobs set to go as he condemned the ‘flabby, unfocused and over-cautious’ state.
The PM used a speech to deliver a damning verdict on the performance of the public sector, saying huge expansion in numbers had not worked.
He announced that NHS England will be abolished altogether, which oversees GP and hospital services, saying it would bring provision back under ‘democratic control’.
Health Secretary Wes Streeting had already declared he would dramatically curb the body – which ministers have labelled the ‘world’s largest quango’.
NHS England is the central bureaucracy that controls more than £190billion a year of funding for health and has 15,000 staff.
Its functions will be taken over by the Department of Health over the next two years, with headcount cut by 9,000 – although it is not clear how many of those will be deployed elsewhere.
Mr Streeting said there would be ‘hundreds of millions of pounds’ of savings.
The NHSE chief executive and national medical director both resigned in recent weeks as the scale of the overhaul became clear.
It effectively reverses a huge reorganisation pushed through under the Coalition. It was welcomed by Tories including Jeremy Hunt, although he pointed out that Mr Streeting previously ruled out ‘top down reorganisation’.
NHS bosses voiced caution, saying there will be ‘disruption’ and patient care must be ‘prioritised’.
Sir Keir told the audience in Hull that government was employing ‘more people than we’ve employed for decades’.
‘Yet look around the country, do you see good value everywhere? Because I don’t,’ he said. ‘I actually think it’s weaker than it’s ever been.’
Sir Keir said he believed in ‘active government’ but that did not mean it should be ‘bigger’.
While being careful to praise civil servants, Sir Keir complained that Whitehall in general has not managed to improve frontline services.
However, the intervention has already drawn a furious response from unions who branded it ‘unrealistic’ and insulting. Ministers have been playing down suggestions of wide scale jobs cuts, arguing that efficiency is the real goal.
No10 has been forced to deny that the initiative has been nicknamed ‘Project Chainsaw’ internally.
Downing Street said the reference to Trump adviser Elon Musk wielding a chainsaw to represent his cuts to government spending was ‘juvenile’.
Keir Starmer will launch a striking assault on the ‘flabby, unfocused and over-cautious’ state today as he vows an AI revolution in the civil service to save £45billion
Abolishing NHS England will reduce ‘duplication’, saving money that can then be spent on frontline services, the Prime Minister said
Health Secretary Wes Streeting had already declared he would dramatically curb the body – which ministers have labelled the ‘world’s largest quango’
The NHS England chief executive Amanda Pritchard (pictured) and national medical director both resigned in recent weeks as the scale of the overhaul became clear
Sir Keir said abolishing NHS England will reduce ‘duplication’, saving money that can then be spent on frontline services.
Answering a question from a cancer patient on how the decision would improve the situation, the premier said: ‘Amongst the reasons we are abolishing it is because of the duplication.
‘So, if you can believe it, we’ve got a communications team in NHS England, we’ve got a communications team in the health department of government; we’ve got a strategy team in NHS England, a strategy team in the government department. We are duplicating things that could be done once.
‘If we strip that out, which is what we are doing today, that then allows us to free up that money to put it where it needs to be, which is the front line.’
He added that the Government wanted to push power to frontline workers ‘and away from the bureaucracy which often holds them up’.
In a statement, Mr Streeting said: ‘This is the final nail in the coffin of the disastrous 2012 reorganisation, which led to the longest waiting times, lowest patient satisfaction, and most expensive NHS in history.
‘When money is so tight, we can’t justify such a complex bureaucracy with two organisations doing the same jobs. We need more doers, and fewer checkers, which is why I’m devolving resources and responsibilities to the NHS frontline.
‘NHS staff are working flat out but the current system sets them up to fail. These changes will support the huge number of capable, innovative and committed people across the NHS to deliver for patients and taxpayers.
‘Just because reform is difficult doesn’t mean it shouldn’t be done. This government will never duck the hard work of reform. We will take on vested interests and change the status quo, so the NHS can once again be there for you when you need it.’
Asked in the Commons for details of the schedule and job cuts, Mr Streeting said: ‘In terms of timeframes, we’ll be working immediately to start bringing teams together as we have been with the ‘one team culture’ we’ve been building for the last eight months.
‘But I want the integration of NHS England into the department to be complete in two years.
‘She asks about the reduction of officials – the size of NHS England: there are 15,300 staff; in the Department of Heath and Social Care: 3,300 – and across both we’re looking to reduce the overall headcount by 50 per cent, and that will deliver hundreds of millions of pounds worth of savings, and the exact figures will be determined by the precise configuration of staff, and obviously we’ll keep the House updated on that.’
Mr Streeting said primary legislation will have to be passed by MPs – but some work can be done before that is necessary. He said he was talking to Commons leader Lucy Powell about potential scheduling.
Matthew Taylor, chief executive of the NHS Confederation, and Daniel Elkeles, incoming chief executive of NHS Providers, said: ‘This is the end of an era for the NHS and marks the biggest reshaping of its national architecture in a decade.
‘Our members will understand the dynamics at play here, but it comes at an extremely challenging time, with rising demand for care, constrained funding and the need to transform services. History tells us this will cause disruption while the transition is taking place.
‘Much of trust and ICS leaders’ focus will need to go on stabilising the NHS in the short term as they prioritise patient care, but we also need to ensure we get the right balance between recovery and reform given the opportunity provided by the upcoming 10-year plan.’
In his speech, Sir Keir laid into the ‘cottage industry of checkers and blockers slowing down delivery for working people’.
The PM was at the Hull HQ of Reckitt Benckiser Health Care UK today
In a separate article for the Telegraph, the premier said: ‘The Civil Service has grown by 130,000 since the referendum, and yet frontline services have not improved. It’s overstretched, unfocussed and unable to deliver the security people need today.
‘So we will make sure our civil servants are equipped for the challenges of the modern era.
‘We’ll bring them closer to communities, free them from bureaucracy and provide the right incentives for success.
‘We’ll harness the power of AI to make every department more innovative and efficient.
‘We’ll redirect resources towards the frontlines. More teachers in schools, nurses in hospitals and police on our streets to make the state work for working people.
‘Because the problem isn’t our fantastic civil servants – it’s the system they’re stuck in.’
Highlighting problems with the planning system, Sir Keir said that he knew business were ‘unable to grow because of red tape’.
‘Families unable to buy because an overcautious flabby state got in the way,’ he added.
He is setting a new target across government to cut administrative costs of regulation by 25 per cent.
Sir Keir said no official’s ‘substantive time’ should be spent on a task where technology can ‘do it better, quicker and to the same high quality and standard’.
He set out details of how he plans to digitise public services and the state, underpinned by the mantra that ‘no person’s substantive time should be spent on a task where digital or AI can do it better, quicker and to the same high quality and standard’.
Sir Keir said 2,000 tech apprentices would be recruited to boost the take-up of AI on Whitehall.
He argued that global uncertainty means the Government must ‘go further and faster in reshaping the state to make it work for working people’.
But Sir Keir denied that he was considering a ‘return to austerity’, with welfare cuts also expected to be announced soon.
‘Part of the problem we’ve got with our public services is what was done to them a decade or so ago, so we’re not going down that route, none of our plans are going down that route,’ he said.
‘When it comes to welfare, there are important principles: We must support those that need support, but equally we must help those who want to get back into work, into work. And, at the moment, the system doesn’t do that.’
It was ‘really shocking’ that one in eight young people are ‘stuck in a world of benefits and support’ rather being in work or training.
‘That’s not defensible. So, it’s got to change. We’ve got to reform it.’
The welfare system ‘doesn’t help people to get into work, because it’s set up in such a way that even if you take the risk of coming off benefit and into work, and it doesn’t work for you, you end up worse off than when you started’.
On Tuesday, Sir Keir instructed ministers to stop a ‘trend’ of ‘outsourcing’ decisions to ‘other bodies’ begun under the previous government and assess whether regulations contributed to Labour’s agenda.
Later the same day, the Government also announced that the Payment Systems Regulator will be abolished and merged with the Financial Conduct Authority in what Sir Keir said was ‘the latest step in our efforts to kickstart economic growth’.
However, critics have mocked the move, pointing out Labour has created other quangos and the watchdog does not cost the taxpayer anything.
Ministers appear to have grown increasingly frustrated with the role of regulators as they attempt to boost the UK’s economy, with the Chancellor urging them to focus more on encouraging growth.
Sir Keir is expected to say: ‘The great forces buffeting the lives of working people, and an era of instability driving in their lives…
‘The need for greater urgency now could not be any clearer. We must move further and faster on security and renewal.
‘Every pound spent, every regulation, every decision must deliver for working people… If we push forward with the digitisation of government services. There are up to £45bn worth of savings and productivity benefits, ready to be realised.
‘And that’s before we even consider the golden opportunity of artificial intelligence. An opportunity I am determined to seize.’
Technology Secretary Peter Kyle said: ‘There is a £45billion jackpot to secure if we use technology properly across our public sector – but we can’t hope to come close to securing that if we don’t have the right technical talent with us in government.
‘Not only will these changes help fix our public services, but it will save taxpayer cash by slashing the need for thousands of expensive contractors and create opportunities across the country as part of our Plan for change.’
However, No10 yesterday refused to say whether the civil service headcount will be reduced under the proposals for reform.
Asked whether the state would be smaller, the PM’s press secretary said: ‘No, it’s about reshaping the state and taking advantage of technology.’
The Guardian reported yesterday that No10 and the Treasury were interested in proposals drawn up by think tank Labour Together to reshape the state under plans dubbed ‘project chainsaw’.
The Prospect trade union said the Government must reform civil service pay to compete for the skills it needs.
General secretary Mike Clancy said: ‘Technology has the potential to transform government delivery and improve outcome for the public, and it is right that the government are pressing ahead with plans to make better use of new tech in the public sector.
While being careful to praise civil servants, Sir Keir will complain that Whitehall in general has not managed to improve frontline services
No10 has been forced to deny that the initiate has been nicknamed ‘Project Chainsaw’ internally, after Elon Musk’s dramatic stunt to highlight US cost-cutting
‘However the government will find it challenging to compete for the skills needed to deliver on this agenda under the current pay regime, which is why Prospect is campaigning for more pay flexibility to recruit and retain specialists in the civil service in areas like science and data.
‘Government should also be doing more to utilise the talented specialists it already has at its disposal, many of whom are working in regulators and other agencies that have been starved of funding in recent years.
‘Civil servants are not hostile to reforms, but these must be undertaken in partnership with staff and unions. I urge everyone in government to avoid the incendiary rhetoric and tactics we are seeing in the United States, and to be clear that reforms are about enhancing not undermining the civil service.’
