NHS Direct announced today that it will “cease operations” at the end of March 2014 and that its services will be commissioned to other organisations.

EHI reported earlier this year that the organisation had decided to withdraw from all of its NHS 111 contracts as they were “financially unsustainable”, and that the future of the organisation was in jeopardy.

NHS Direct has since been in discussions with the NHS Trust Development Authority, the Department of Health and NHS England about its future as a viable independent organisation. The statement released today says it has arrived at a decision to close down its service.

NHS Direct was one of the very first digital services to be developed for the NHS and has been operating for 15 years. It started out as a telephone helpline, and went on to develop an online presence, winning awards for services such as its online ‘symptom checkers.’

Chair Joanne Shaw said it had been a privilege to work for the organisation. “The closure of NHS Direct marks the end of its 15 years of continuous innovation, during which time it has led the world in remote health assessment, advice and information,” she said.

“I look forward to seeing other organisations take forward a number of the services developed by NHS Direct, and I wish them well as they exploit the ever-growing reach and power of technology, to provide value to patients and the NHS.”

NHS Direct was taken by surprise when former health secretary Andrew Lansley announced the introduction of NHS 111 as a national service, commissioned locally.

It rapidly developed plans to win 111 business, but has since been hit by its decision. Delays in the roll-out of 111 services have affected its business; and it seems to have underestimated the time and cost required to deal with the calls that it has been handling.

NHS Direct’s 111 contracts will be transferred to alternative providers, most of them to ambulance trusts, by the end of November.

The statement released today says that NHS England does not intend to continue to commission the dental nurse assessment service, or the complex health information and medicine enquiry service, beyond the end of March next year.

“As a result, we expect all elements of the original 0845 telephone service will cease by March 2014,” says the statement.

The trust originally held nine contracts to provide the non-urgent 111 health line across the country.

However, its problems with the contracts meant it was £1.5m in red for this financial year by June. EHI also reported earlier this year that a report from the National Audit Office revealed that the decommissioning of its old 0845 service had cost nearly £70m.

At its board meeting next Monday, NHS Direct will launch a formal consultation into the implications of its decision has for its 700 strong work force.

“It is hoped that the number of redundancies arising will be kept to a minimum through transfer and redeployment of staff to other organisations,” says today’s statement.

Unison officer for NHS Direct, Michael Walker, said it is a “disgrace that so much public money is being wasted to sacrifice 700 good quality nurses and health advisors, only to replace them with an inferior privatised service”.

He argued that the closure of NHS Direct will add to the pressures on overstretched A&E units, ambulance services and GPs.

"Lessons do not seemed to have been learned following the highly expensive and time-consuming switch to 111 in April.

“The switch to 111 caused fragmentation, disorganisation and uncertainty for thousands of staff, with a knock on effect to patient care, and this is now going to happen all over again," Walker said.