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Lansley throws Department of Health agencies on the bonfire

By Lilian Anekwe

The axe has fallen on a string of Department of Health arm's length bodies, as the Government dramatically ramps up its crackdown on NHS efficiency by announcing it will cut NHS administration by half.

During the election the Conservatives pledged to light a ‘bonfire of quangos' and make ministers and NHS staff accountable for decisions by removing thousands of NHS managers and public sector workers.

The vow began to take shape today, as the Department of Health announced several agencies, including the NHS Institute for Innovation for Improvement – who had been tasked with identifying and setting indicators for primary care efficiency gains – will be scrapped from April 2012.

Other high-profile victims of the cuts, outlined in a report on the Department of Health's review of arm's length bodies published today, include the Health Protection Agency and the National Patient Safety Agency.

In a ministerial statement, health secretary Andrew Lansley said the Government had an ‘economic imperative' to slash the red tape within the NHS, and said that their pledge to guarantee real-terms increase in healthcare spending could only be met by making ‘significant cuts in the costs of healthcare bureaucracy'.

The Government estimates that the overhaul of quangos and arm's lengths bodies will reduce administration costs by 45%.

The Department of Health agencies set to be axed are:

• the Health Protection Agency and the National Treatment Agency, whose functions will be transferred the new Public Health Service
• the National Patient Safety Agency and NHS Institute for Innovation and Improvement, the Alcohol Education Research Council, and the Appointments Commission will be abolished
• the NHS Litigation Authority and NHS Business Services Authority will be subject to a 'commercial review' to gauge its long-term viability
• others, including the Council for Healthcare Regulatory Excellence and the General Social Care Council will either have their functions transferred or moved out of the sector

Six bodies have a ‘clear future' the review concluded and will in several cases have their remits expanded. NICE, the Care Quality Commission, the Medicines & Healthcare products Regulatory Agency (MHRA) , and the NHS Information Centre will all escape the cuts.

Mr Lansley said: ‘The Government's proposed reforms of the NHS will establish more autonomous institutions, with greater freedoms, clear duties and transparency in their responsibilities to patients.

‘Power will be devolved to the frontline. Liberating the NHS will fundamentally change the role of the Department and those bodies accountable to it. Changes to the arm's-length body sector must reflect these wider reforms.'

The NHS Confederation, which represents NHS organisations, backed the streamlining of the arms length sector.

But Nigel Edwards, its acting chief executiv, warned: 'It is important to ensure that this process does not mean important functions carried out by the bodies being abolished are lost to the NHS.

'We must also never lose sight of the fact that, while this process may help to save money, the sums involved are likely to only make a very small contribution to the £15-20 billion the NHS needs to find over the next four years.'

Slashing quangos will save 45% in NHS administration costs