Speaking this morning to the Public Accounts Committee, Kelly said the targets set out by incoming chief executive Sir James Mackey will require a ‘redundancy scheme'.

Kelly, who is stepping down at the end of March, said he expected the detail of the plans to be published as the 10-Year Health Plan is finalised and said redundancies would not be just about ‘duplication' with the DHSC but ‘will have to be a hard look at what functions are being done where'.

The chief financial officer said a vacancy freeze had with ‘limited exceptions' begun and he expected Sir James would be announcing his transition team in the ‘coming days'.

He said he expected details of the change in staff functions to be announced in the ‘coming weeks'.

Speaking earlier, Sir Chris Whitty, acting permanent secretary and chief medical officer at Department of Health and Social Care, was not able to say how many redundancies would be made in the Department  but the ‘direction of travel is clear'.

Sir Chris said a cap on new appointments was in place with a voluntary exit scheme to be announced probably before Easter which will run until November.

‘I'm not saying that everything will be over by November because the process the secretary of state has set in train in terms of working closer together of DHSC and NHSE has a lot of consequences that need to be thought through,' Sir Chris added.