Thousands of National Health Service staff in England, the United Kingdom,.are set to lose their jobs after an agreement was reached with the Treasury, allowing the health service to overspend this year to cover the cost of redundancy payments.
Earlier in 2025, the government announced plans to cut 18,000 administrative and managerial positions as part of a major restructuring that will see NHS England, the body responsible for running the National Health Service, absorbed into the Department of Health and Social Care.
The move will also include significant staff reductions across local health boards.
Negotiations between NHS leaders, health ministers, and the Treasury had focused on how to fund the estimated £1 billion one-off cost associated with the redundancies.
The NHS had initially sought additional funding, but the Treasury refused, instead agreeing to a compromise permitting the service to overspend temporarily.
As part of the arrangement, the NHS will be expected to recover the costs in the coming years through savings generated by the job cuts.
Government sources stressed that no new funding is being added to the health service’s budget beyond what was approved in the latest spending review, an additional £29 billion a year above inflation by 2028–29.
Speaking at the NHS Providers’ conference in Manchester on Wednesday, Health Secretary Wes Streeting is expected to reassure the public about how funds are used.
“I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely,” he said.
“We’re now pushing down on the accelerator and slashing unnecessary bureaucracy, to reinvest the savings in front-line care.
“It won’t happen overnight, but with our investment and modernisation, we will rebuild our NHS so it is there for you when you need it once again.”
According to the government, the restructuring is projected to generate £1 billion in annual savings by the end of the current parliament. Officials claim that every £1 billion saved in bureaucracy could instead fund 116,000 hip and knee operations.
Under the new structure, NHS England will be fully integrated into the Department of Health within two years. Additionally, Integrated Care Boards, the regional bodies that plan and coordinate local health services, will see their staff numbers reduced by 50%.
Chief executive of NHS Providers, Daniel Elkeles, described the Treasury agreement as a sensible compromise.
“This is a pragmatic step that means planned redundancies can now go ahead,” he said.
“It reflects the flexibility of a three-year settlement, allowing some funding to be brought forward in order to generate future savings to go into front-line care.
“However, we must recognise the position of staff affected by these changes, people who have offered commitment and service to the NHS, who face a very uncertain future.”
However, not all reactions have been positive. Patricia Marquis of the Royal College of Nursing warned that such mass redundancies could ultimately prove counterproductive.
“Front-line services need more investment, but to do this off the backs of making thousands of experts redundant is a false economy,” she said.
“Expert registered nurses working across NHS England and ICBs don’t just run vital public health programmes and oversee care programmes for the vulnerable, they connect the NHS and social care services with one another.
“To imply these are administrators shows a complete lack of understanding of their roles and how they contribute to patient care.”
NHS England was originally created as part of the 2012 health reforms led by then, Health Secretary Andrew Lansley, with the goal of freeing the service from direct political influence. Ministers were to focus on strategy rather than day-to-day management.
However, Lansley’s successor, Jeremy Hunt, later criticised the outcome, describing NHS England as a “bureaucratic monster” that hinders innovation. Reports have suggested that some NHS organisations were burdened with filling out up to 250 forms a month to satisfy both NHS England and the Health Department.
Many frontline workers have also complained that NHS England has been overly controlling, even requiring individual NHS trusts to seek approval for routine matters such as granting media interviews.
Despite the concerns, ministers have defended the reforms, arguing that a democratically elected government should maintain control over the daily operations of the health service.
Yet, with the Labour Party, which previously criticised the Conservatives for repeatedly reshaping NHS structures, now leading this reorganisation, analysts warn it carries significant political and operational risks.
Within the health sector, there is already widespread unease about the disruption and uncertainty caused by the overhaul.
Given that NHS England oversees the system’s daily operations, specialist services, workforce training, and digital innovation, experts fear the changes could lead to further instability at a time when the service is already under intense pressure.
