A long-anticipated axe fell on the NHS Information Authority (NHSIA) today when its abolition was announced as part of the Department of Health’s “Arm’s-length Bodies Review”.

The NHSIA’s IT work will be incorporated into the National Programme for IT (NPfIT) and its information-related functions will be transferred to a new Health and Social Care Information Centre created to reduce burdens on the frontline by co-ordinating information requirements across a wide range of bodies.

The announcement from the Department of Health said that the NPfIT would become an executive agency for three to five years.  Executive agencies are bodies that take responsibility for particular business areas. The agencies are part of the department and accountable directly to it.

Announcing the review, which is targeted to save £500m, health secretary, John Reid, said: “Reducing the cost of arm’s-length bodies will generate resources that are the equivalent of four new hospitals or 20,000 more nurses by 2008.

“The arm’s-length body sector has done a lot of good work, but it has grown over several decades and no longer meets current health and social care needs or those of future generations.The NHS has embarked on a long-term programme of reform to devolve power and responsibility for resources to frontline NHS organisations.”

Dr Gwyn Thomas, NHSIA chief executive, commented: “The authority has had a very successful five years. We have seen significant growth in the use of our major services such as NHSnet, the NHS Number, NHS Numbers for Babies, payments for GPs, national screening programmes and analysis of data to support clinical audit. All of these now underpin the essential day-to-day work of the NHS.

“We have also completed a number of major development projects such as SNOMED CT clinical terminology and the European Computer Driving Licence for all NHS staff and some of these have already become valued services in their own right, for example the National electronic Library for Health which is a major support for clinical governance and nhs.uk – the gateway for patients to access information on NHS services.   

“The excellent progress that has been made in leading the professional development of health informatics staff by working in partnership with other organisations is also an important authority legacy.”

He added that NHSIA staff had worked very hard over the past five years with high levels of professionalism and commitment to the NHS. They could be very proud of their achievements.

What will happen to the NHSIA’s 900 plus staff is unclear, though some are already on secondment to the NPfIT. The review announcement said that the department planned to develop a  “memorandum of understanding on human resources processes” with the organisations affected by the review.  

Other bodies affected by the review include the Prescriptions Pricing Authority and the NHS Counter Fraud and Security Management Authority which are to be abolished.  Their functions become part of a new NHS Business Services Authority.