Health leaders call for national redundancy pot to fund NHS job cuts

NHS leaders are urging the Chancellor to rapidly create a national staff redundancy fund to smooth the pathway to the major budget cuts they are being required to make this year by the government. 

Integrated Care Boards (ICBs) have been charged with cutting their running costs by 50 per cent from October 2025, with individual plans to be submitted for government approval by the end of next month. Alongside this, NHS trusts have been told to reduce their “corporate cost growth” by half the amount from the year before the pandemic. 

But without a national fund that NHS trusts and ICBs can access, NHS leaders say the redundancy programme will take much longer to deliver and will reduce the level of savings from job cuts that can be delivered this year.  

This would then mean that the NHS would then start the following financial year, the point at which the government’s Ten-Year Plan for Health would begin its implementation, in a state of financial deficit. Health leaders fear that doing this would put the reform agenda, including the commitment to reduce waiting times to 18 weeks by the end of Parliament and to shift more care into the community, at risk. 

While recent media reports have suggested up to 30,000 roles across the NHS could be removed, including through the planned abolition of NHS England, and that the total bill could reach £1bn, the NHS Confederation has heard varying figures from leaders on the extent of their expected cuts.  

Some leaders of NHS trusts have said they are each looking to cut between 200 and 500 roles, while some ICB leaders have said they are likely to remove anywhere between 300 and 400.  

Several trust leaders said that they were budgeting for around £12m worth of redundancy payouts and associated costs. 

When looking at the proportion of the workforce that could be removed across NHS trusts, individual estimates from leaders have varied from 3 per cent to over 11 per cent.  

Health service leaders have warned that without access to a dedicated redundancy fund, as was confirmed for NHS England staff in its abolition in the Spring Statement, the process of scaling down will take much longer than the government has asked.  

If they are forced to provide the necessary payouts from their own budgets, they say the process will be markedly slowed down and risks stalling the efficiency savings they can make. Recent analysis has already revealed that the gap between trusts’ regular income and expenditure is £6bn, and that this underlying deficit could derail the government's reform plans. 

One NHS trust CEO said: "Essentially, without clear guidance on underwriting redundancy options, whether these are voluntary, mutual, or compulsory, we are dependent on natural turnover and … [other] processes, which are slow and cumbersome.  

“Accelerating savings would be possible if the underwriting of impacts could be funded within the year."  

Another said: “We are not planning a redundancy programme as it will be unaffordable, our plan is to reduce headcount through natural turnover although this puts a level of risk on delivery.” 

Matthew Taylor, chief executive of the NHS Confederation called on the government to commit to urgently establishing a redundancy fund for NHS trusts and ICBs. 

“Health leaders understand the troubling financial situation facing the country and the need to improve efficiency where they can, as they have already demonstrated by significantly reducing their planned deficit for the year ahead.  

“However, the scale and pace of what has been asked of them to downsize is staggering and leaves them fearful of being able to find the right balance between improving performance and implementing the reforms needed to put the NHS on a sustainable footing. 

“They have told us that unless the Treasury urgently creates a national redundancy fund to cover these job losses, any savings the government hopes to make risks being eroded, at best and completely wiped out, at worst. If the Ten-Year Plan for Health is to be realised, it requires the NHS to be in a position of financial stability.”  

The call from NHS leaders to create a national redundancy fund comes as the government finalises its Ten-Year Plan for Health as well as the three-year funding settlement that will be announced as part of the Spending Review in June.  

NHS leaders anticipate the settlement will be much less than the long term historical average increase of around 4 per cent per year with the government’s latest Spring Statement already revealing that the funding increase for 2026/27 will drop to 1.8 per cent in real terms.