The government are supposed to be saving money by merging NHS England and the Department of Health. But the running costs of both are going UP under Labour. And the those aren’t the only places where the cost of the central NHS bureaucracy is increasing:
The monthly data is published here. NHS England has gone from an annualised running cost of £1,152m to £1,306m – so up £153 million a year – pretty strange for an organisation that is supposedly being abolished to save money. That alone is a 13% increase.
There are 11 organisations in the central NHS bureaucracy where we have data over the whole period1.
In total, the central health bureaucracy (including the department of health and agencies) is up by £284m a year – a 12% increase, which is enough to employ 8,000 more basic grade nurses.
I have also tried to understand what is going on below the hood.
Overall FTE staffing in the central bureaucracy is very very slightly up (by 82 or 0.2%), so the growth in the bill is higher pay. One reason for the pay growth may be churn - there are lots more people in the other agencies and I suspect that there will be a lot of moving and “rebadging” around the DHSC - NHSE merger.
In some agencies this is quite striking – the NHS Business Services Authority has 758 (or 17%) more payroll staff than July 2024, and its total paybill is up 38%. it is not clear to me why.
I wanted to check if the growth in paybill is the costs of sacking people and it isn’t. There has been a big increase in – “Payroll staff costs; Allowances” which may contain such costs. But even without that payroll salary costs are up 12% (cell AE63) - so this is making little to no difference to the overall picture, which is basically this: people moving around in the system, overall numbers not shrinking at all, and the costs growing substantially.
So much for a crackdown on central bureaucracy…
I have excluded NHS Blood and Transplant because they do operational stuff too not just management. There are two smaller agencies which only provided data since Aug 2025 – the NHS Counter Fraud Authority and the Health Services Safety Investigations Body, so I have excluded them.
Could part of it be the increased NI costs? I know the NHS was 'made whole' by the treasury but was that in the form of more income, rather than avoidance of the extra costs?
There'll be some pay rises as well, though, as medics have done very well under this Government.
Could it be that people just moved from one organisation to the other with just a title change?
It satisfies the tick-box managers and they can then award themselves a bonus.