The costs of the changes that were announced on 16 May will depend on a number of factors, including the location of new organisations being created, the number of people in the new organisations and new pay ranges for very senior managers, as well as changes in estate costs following reconfiguration.
These arrangements are currently being worked up and discussed with trade unions and staff. Until those discussions have been concluded and the detail of new arrangements agreed, it is not possible to confirm or accurately forecast costs.
Commissioning a patient-led national health service is designed to deliver £250 million savings from administration costs through streamlining for reinvestment in frontline services. The savings are expected to be realised by the end of 2007 and then every year for reinvestment beginning in 2008-09.
Strategic health authorities (SHAs) have been asked to oversee the Generation of the savings locally. Each SHA has a cost “envelope” that it should realise but it is for local determination to work out the best way of achieving these savings.