NHS staff are preparing for a “brutal” round of cuts, with jobs expected to be in the firing line.
Several hospitals have already reported that jobs will go, with more announcements expected to follow.
According to the BBC, a £2bn fund has been set aside to cover one-off costs in the health service, including redundancies and redeployments.
Hospital staff are particularly vulnerable because up to two-thirds of their budget is accounted for by labour costs.
Southampton Hospitals Trust is cutting 400 jobs this year and 200 next year.
Meanwhile, Cambridge University Hospitals Trust and Liverpool’s Alder Hey Hospital have both asked staff who want to leave to put themselves forward for a pay-off.
Andrew Lansley, the new health secretary, previously said the coalition government wanted to see efficiency savings, but this did not necessarily equate to cuts. But now the existence of the £2bn fund has prompted speculation that jobs will go.
Paul Flynn, deputy chairman of the British Medical Association, said: “I would hope redundancy is not the first thing this fund is going to be used for, but it seems job losses will be inevitable.
“We hear about the drugs budget and other areas where savings can be made, but staff costs are the biggest single cost the NHS faces.”
Michael Sobanja, of the NHS Alliance, which represents staff working outside hospitals, added: “I think it is pretty clear headcount will drop. The NHS is facing a pretty brutal time.”
But David Stout, of the Primary Care Trust Network, which represents managers, said: “Redundancy is a legitimate use of this money, but it is also about paying for redeploying staff, retraining them and setting up new services. It is a change fund and is being seen as a perfectly sensible move.”