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The impact assessment, published alongside the Health and Social Care Bill, estimated that the redundancies resulting from the modernisation will cost £810 million. The estimate for total redundancy costs in primary care trusts is £634 million, and the estimate for strategic health authorities is £84 million.
This upfront cost will result in a £1.5 billion saving per year by 2014-15, which is a one-third reduction in the administrative spending across the system. The upfront costs of the modernisation will be more than recouped from the cost-savings by the end of 2012-13.
The impact assessment is available at:
A copy has been placed in the Library.