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Hit squads to tackle NHS deficit
John Carvel, social affairs editor
Friday December 02 2005
The Guardian
The health secretary Patricia Hewitt yesterday ordered budgetary hit squads into the 50 highest overspending health authorities and trusts in England to halt an escalating financial crisis that threatens the stability of the NHS.
In response to an application from the Guardian under the Freedom of Information Act, she released confidential returns forecasting a collective overspend of £623m by the end of the financial year. A quarter of all the country's trusts are forecasting deficits that total £948m.
The figure shocked health ministers, who thought record increases in the NHS budget should have provided plenty of slack in the system.
The Treasury had been assured by the Department of Health that it had NHS funding under control after overspending by £219m last year.
The department said the hit squads - to be known as "turnaround teams" - would be selected on Monday after a lightning tendering exercise over the weekend involving City accountancy firms.
They will be instructed to cut spending to reduce the deficit to £200m by March without endangering patient safety. But quick and easy savings may be hard to make as trusts are already engaged in economies including ward closures, lengthening waiting times, recruitment freezes and the reduced use of agency nurses.
Within the last few days Norfolk, Suffolk and Cambridgeshire health authority stopped East Suffolk primary care trust negotiating with unions to defer paying March salaries until April.
The trust said it would not be able to afford payment in the final month of the financial year, but was instructed to find alternative savings.
Cuts in the most cash-strapped trusts will come at the worst possible time of year as Britain heads into a winter that is forecast to be colder than usual.
Health department figures show that a quarter of trusts are forecasting deficits totalling £948m in 2005/6. Surpluses in other parts of the NHS are expected to be £325m, leaving a net deficit of £623m.
A spokesman said 37 organisations were responsible for two-thirds of the gross deficit. They included: Surrey and Sussex Healthcare Trust (£41.2m); St George's Healthcare Trust, Tooting (£34.5m); Hillingdon primary care trust (£25.7m) and Hampshire and Isle of Wight health authority (£24.1m).
Figures supplied to the Guardian suggested the plight of some trusts may be worse than the department realises. For example Mid Yorkshire Hospitals has forecast a deficit of £14.7m, but health department officials said they were unaware that it is also receiving £19.9m in support from West Yorkshire health authority.
Sir Nigel Crisp, the NHS chief executive, told the Commons health committee that the department was publishing mid-year forecasts for the first time "as a result of an FoI application".
Analysis and publication of the information gained through FoI was pre-empted by the department's decision to make revised mid-year returns generally available.
A spokeswoman said its timing was dictated by the need to provide information to the select committee.
Sir Nigel handed over a dossier at the end of a three-hour session without giving MPs the opportunity to question him on it. He said: "Any actions that the NHS takes to reduce deficits should not lower the quality of care provided to NHS patients."
Ms Hewitt said the £623m forecast deficit was equivalent to less than 1% of the NHS budget, worth £76bn this year.
The shadow health secretary Andrew Lansley said: "NHS finances are spiralling out of control. Patients will bear the brunt of this financial mismanagement as frontline services are cut to balance the books."
Steve Webb, the Liberal Democrat health spokesman, predicted "drastic and swingeing cuts," adding: "The rollercoaster of NHS trust finances makes it impossible for hospital bosses to plan effectively."
John Appleby, chief economist at the independent King's Fund health research institute, said: "The Guardian is to be congratulated for persuading the health secretary to publish these figures. This transparency should now become routine." The British Medical Association welcomed the release of the figures but warned against "bully boy tactics" among the teams working with struggling organisations.
Copyright Guardian Newspapers Limited
