To ask the Secretary of State for Health pursuant to the answer of 7 February 2011, Official Report, column 114W, on the NHS: re-organisation, what recent estimate he has made of the likely cost of redundancy payments following the proposed abolition of (a) primary care trusts and (b) strategic health authorities under the provisions of the Health and Social Care Act 2012.

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 related to staff employed 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:

www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsLegislation/DH_123583

A copy has already been placed in the Library.