NHS England redundancies: voluntary redundancy scheme and staff pay explained as 18,000 workers lose jobs
Thousands of NHS employees face uncertainty as ministers push through sweeping reforms 💷
- Around 18,000 NHS staff in England are set to lose their jobs under major restructuring plans
- The Treasury has agreed a £1bn fund to cover redundancy pay-offs this year
- NHS England will merge with the Department of Health, while local care boards halve management roles
- Redundancy pay will follow national NHS rules, offering up to 24 months’ salary for long-serving staff
- Ministers say the reforms will cut bureaucracy and free up funds, but unions warn vital expertise could be lost
Thousands of NHS staff in England are facing redundancy as part of a sweeping overhaul of how the health service is run.
NHS England has struck a deal with the Treasury allowing it to overspend by £1 billion this year to cover redundancy payments for up to 18,000 job losses, one of the largest reorganisations in more than a decade.
The restructure will see NHS England absorbed into the Department of Health and Social Care, while local Integrated Care Boards (ICBs), which oversee regional health planning, are expected to halve their management staff.
Health Secretary Wes Streeting said the changes would “cut bureaucracy” and allow more funding to reach the frontline. He told the BBC: “People want to see the front line prioritised, and that’s exactly what we’re doing.”
The Government says the shake-up will ultimately save £1 billion a year by 2028; enough, it claims, to fund around 116,000 hip and knee operations.
But unions and staff groups warn that thousands of skilled professionals risk being lost in the process.
Patricia Marquis from the Royal College of Nursing said: “Doing this off the backs of making thousands of experts redundant is a false economy.”
How redundancy works in the NHS
Redundancy in the NHS follows a nationally agreed framework known as the NHS Terms and Conditions of Service Handbook (Agenda for Change). These rules apply to most non-medical staff, including administrative, managerial and support roles.
To qualify for NHS redundancy pay, employees must have at least two years of continuous service. Staff are entitled to:
- One month’s notice if they’ve worked for less than four years, rising to 12 weeks after 12 years of service.
- A lump-sum redundancy payment of one month’s pay for each completed year of NHS service, up to a maximum of 24 years.
- The payment is based on the employee’s full-time equivalent salary, and capped at 24 months’ pay in total.
Importantly, “NHS service” includes continuous employment across different NHS organisations, so time worked at a hospital trust, GP practice, or health board can usually be combined.
Is there a voluntary redundancy scheme?
Yes. Where large-scale job reductions are planned, NHS employers often open a voluntary redundancy or early retirement scheme before making compulsory cuts.
These schemes typically invite staff to apply for redundancy on enhanced terms, allowing the organisation to reduce headcount more amicably.
But offers are not guaranteed, and employers can refuse applications if a role is considered essential.
For those aged 55 or over who are members of the NHS Pension Scheme, there may also be the option of voluntary early retirement.
In some cases, pension benefits can be taken early without reduction if the redundancy meets specific criteria.
What happens next
Affected staff will enter formal consultation periods, during which trade unions and HR departments must explore ways to avoid compulsory redundancies, such as redeployment or retraining.
Daniel Elkeles, chief executive of NHS Providers, said the agreement with the Treasury was “pragmatic” but acknowledged the human impact: “We must recognise the position of staff who’ve shown commitment and service to the NHS, but now face a very uncertain future.”
While ministers argue the changes will create a leaner and more efficient health service, for thousands of employees facing redundancy, the coming months promise disruption, uncertainty, and the difficult task of rebuilding careers outside the NHS.
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