Cash-strapped NHS trust warns of debt crisis

Ambulances outside The James Cook University Hospital in Middlesbrough. (6011246)

Ambulances outside The James Cook University Hospital in Middlesbrough. (6011246)

First published in News

BOSSES at one of the region’s biggest hospital trusts have revealed they hired external consultants to help tackle a predicted £29m deficit this year.

In a briefing sent out to nearly 9,000 staff at South Tees Hospitals NHS Foundation Trust, chief executive Professor Tricia Hart said: “We are facing an extremely tough financial challenge – and we we have enlisted external support to help us, not only harness the ideas and enthusiasm of our staff to meet this multi-million pound challenge, but also bring in new ways of working.”

Prof Hart said the financial problems were a combination of factors, from annual ‘efficiency savings’ demanded by the Government, inflation, higher prices, increasing pressure on emergency care, an increasingly elderly population with complex needs and high patient expectations.

The trust – which runs the 1,000 bed James Cook University Hospital in Middlesbrough and the Friarage Hospital, Northallerton – said it managed to head off a predicted deficit of £49.5m by the end of the current financial by introducing more rigorous cost improvement plans.

With fears that the debt could amount to £50m by the end of the following financial year, South Tees bosses said they had enlisted the support of external consultants, McKinsey, “to work with teams across the trust to identify further efficiencies and help them make rapid improvements.”

Asked about the implications for jobs Prof Hart added: “We are not currently predicting redundancies but as workforce is the NHS’ biggest cost then in trying to return the organisation to a stable financial position we do have to keep tight control on vacancies and recruitment.”

Estephanie Dunn, RCN operational manager in the North-East said: “McKinseys have a long and illustrious history of securing very lucrative deals with the NHS to provide advice on how to make cuts to the NHS.

“As McKinseys make more and more money out of a dwindling NHS budget, the budget for front line services gets less and less. This is, to say the least, highly questionable.

“The public needs to ask why central government has forced local NHS trusts into such financial dire straits in the first place, that they are resorting to make such desperate and frankly misguided decisions.”

Trevor Johnston, Unison’s lead officer for health in the North-East, said: “This is absolutely outrageous. What a waste of public money which should be spent on patient care.

Comments (6)

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4:29pm Wed 7 May 14

behonest says...

The union has got this one right. McKinsey's are a very expensive consultancy and I suspect this is costing the taxpayer a fortune.

Just goes to show though, that despite all the money thrown at senior NHS staff over recent years, they are not even capable of justifying their huge salaries by managing the service well and coming in on budget.
The union has got this one right. McKinsey's are a very expensive consultancy and I suspect this is costing the taxpayer a fortune. Just goes to show though, that despite all the money thrown at senior NHS staff over recent years, they are not even capable of justifying their huge salaries by managing the service well and coming in on budget. behonest
  • Score: 7

7:10pm Wed 7 May 14

bambara says...

The UK spends half what the USA does on healthcare.
The UK spends 2/3rds what Germany does on healthcare.

The UK is ranked above both by the World Health Organisation for the quality of it's healthcare provision.
To me that suggests that part of the problem at least is that we are not properly funding the NHS.

You can add to that the internal market inefficiencies which have been introduced where the NHS has been broken up into a number of Trusts and forced to compete against itself. That has added layers of management and red tape which do nothing other than prepare the way for Tory creeping privatisation of the NHS.

Notice how many services are being "contracted out" to private companies now.
Contracted out = Privatised.

The first service the Tories did that with was hospital cleaners, and that was followed by an explosion in hospital acquired infections.
Hospitals had to take the cheapest quote, and what a shock, the work was sub-standard.

How many more people will die as a result of the Tory creeping privatisation of healthcare?

The NHS - NOT safe in their hands.
The UK spends half what the USA does on healthcare. The UK spends 2/3rds what Germany does on healthcare. The UK is ranked above both by the World Health Organisation for the quality of it's healthcare provision. To me that suggests that part of the problem at least is that we are not properly funding the NHS. You can add to that the internal market inefficiencies which have been introduced where the NHS has been broken up into a number of Trusts and forced to compete against itself. That has added layers of management and red tape which do nothing other than prepare the way for Tory creeping privatisation of the NHS. Notice how many services are being "contracted out" to private companies now. Contracted out = Privatised. The first service the Tories did that with was hospital cleaners, and that was followed by an explosion in hospital acquired infections. Hospitals had to take the cheapest quote, and what a shock, the work was sub-standard. How many more people will die as a result of the Tory creeping privatisation of healthcare? The NHS - NOT safe in their hands. bambara
  • Score: 4

7:15pm Wed 7 May 14

loan_star says...

bambara says "The UK spends half what the USA does on healthcare.
The UK spends 2/3rds what Germany does on healthcare.

The UK is ranked above both by the World Health Organisation for the quality of it's healthcare provision.
To me that suggests that part of the problem at least is that we are not properly funding the NHS."

So the UK is ranked higher than the US and Germany according to what you have just said. Doesn't that prove that throwing more money at something is not the answer?
Thats always the Labour way though isn't it, chuck money at it and it will solve all the problems! Never mind using what money they get better instead of wasting it.
bambara says "The UK spends half what the USA does on healthcare. The UK spends 2/3rds what Germany does on healthcare. The UK is ranked above both by the World Health Organisation for the quality of it's healthcare provision. To me that suggests that part of the problem at least is that we are not properly funding the NHS." So the UK is ranked higher than the US and Germany according to what you have just said. Doesn't that prove that throwing more money at something is not the answer? Thats always the Labour way though isn't it, chuck money at it and it will solve all the problems! Never mind using what money they get better instead of wasting it. loan_star
  • Score: 1

7:46pm Wed 7 May 14

David Lacey says...

Precisely. But let us not forget that Labour voted AGAINST ring fencing the NHS budget. If you want to see what a Labour run NHS would look like just refer to Wales - a health disaster area.
Precisely. But let us not forget that Labour voted AGAINST ring fencing the NHS budget. If you want to see what a Labour run NHS would look like just refer to Wales - a health disaster area. David Lacey
  • Score: 1

10:10pm Wed 7 May 14

bambara says...

David, the Labour party do not run the health service in Wales.
The health service in Wales is run by the managers in charge of the health service NHS managers. Those managers are not appointed by the Labour party.
The break up of the NHS into multiple authorities has added more levels of management and made it less efficient.
As it says the financial problems are a combination of factors, from annual ‘efficiency savings’ demanded by the Government, inflation, higher prices.
‘efficiency savings’= Tory cuts
inflation and higher prices = further impacts of tory cuts to the NHS (thinly veiled as below inflation rises)

Loan_star - "Doesn't that prove that throwing more money at something is not the answer?"
Well it proves that the UK has not thrown money at the NHS, and it proves that Labour has not thrown money at the NHS, and it proves that the NHS is already highly efficient. It therefore also begs the question, as the UK health service (despite the inefficiencies imposed by it's break up into multiple "trusts") is already highly efficient, where do the Tories expect these continual "efficiency savings" to come from?
Thats always the Labour way though isn't it, chuck money at it (after 10 years of Labour government the UK still spent only half what the US does, and only 2/3rds what Germany does, rather disproves that little rant doesn't it) and it will solve all the problems! Never mind using what money they get better instead of wasting it. (With half the resources the USA spends, and 2/3rds the resources that Germany spends the UK is still according to reports from WHO more efficient and effective than either of these countries. Which also rather proves that the NHS is not "wasting it")

So the figures prove, the NHS is efficient, it is effective, and it is making good use of the money it has. Any problems beyond that are therefore by definition down to underfunding.

(Note the WHO Report was released prior to the Tories coming to power, so the impact of Tory cuts is not included in the figures. The numbers used are roughly half way through the Labour government.)
David, the Labour party do not run the health service in Wales. The health service in Wales is run by the managers in charge of the health service NHS managers. Those managers are not appointed by the Labour party. The break up of the NHS into multiple authorities has added more levels of management and made it less efficient. As it says the financial problems are a combination of factors, from annual ‘efficiency savings’ demanded by the Government, inflation, higher prices. ‘efficiency savings’= Tory cuts inflation and higher prices = further impacts of tory cuts to the NHS (thinly veiled as below inflation rises) Loan_star - "Doesn't that prove that throwing more money at something is not the answer?" Well it proves that the UK has not thrown money at the NHS, and it proves that Labour has not thrown money at the NHS, and it proves that the NHS is already highly efficient. It therefore also begs the question, as the UK health service (despite the inefficiencies imposed by it's break up into multiple "trusts") is already highly efficient, where do the Tories expect these continual "efficiency savings" to come from? Thats always the Labour way though isn't it, chuck money at it (after 10 years of Labour government the UK still spent only half what the US does, and only 2/3rds what Germany does, rather disproves that little rant doesn't it) and it will solve all the problems! Never mind using what money they get better instead of wasting it. (With half the resources the USA spends, and 2/3rds the resources that Germany spends the UK is still according to reports from WHO more efficient and effective than either of these countries. Which also rather proves that the NHS is not "wasting it") So the figures prove, the NHS is efficient, it is effective, and it is making good use of the money it has. Any problems beyond that are therefore by definition down to underfunding. (Note the WHO Report was released prior to the Tories coming to power, so the impact of Tory cuts is not included in the figures. The numbers used are roughly half way through the Labour government.) bambara
  • Score: -1

8:30am Thu 8 May 14

MartinMo says...

bambara

The 3 healthcare systems you mention cannot be judged against each other because they are all run differently. Both US and Germany citizens have healthcare insurance with the Germans automatically paying through salary donations.

When surveys are carried out in the UK, the general public more likely to give a positive response are targeted. In other words, someone receiving free healthcare and medication is more likely to respond more positively than some who pays for the same health care through taxation and then still has to pay for pescription medication.

So ask 100 US citizens on benefits (no insurance) what the think of their health care you will get a negative response whilst the majority of brit citizens on benefits from 100 will respond positively.

Personally, I believe the NHS, for my tax pounds is abysmal, the health care I received whilst living in Germany was far superior.
bambara The 3 healthcare systems you mention cannot be judged against each other because they are all run differently. Both US and Germany citizens have healthcare insurance with the Germans automatically paying through salary donations. When surveys are carried out in the UK, the general public more likely to give a positive response are targeted. In other words, someone receiving free healthcare and medication is more likely to respond more positively than some who pays for the same health care through taxation and then still has to pay for pescription medication. So ask 100 US citizens on benefits (no insurance) what the think of their health care you will get a negative response whilst the majority of brit citizens on benefits from 100 will respond positively. Personally, I believe the NHS, for my tax pounds is abysmal, the health care I received whilst living in Germany was far superior. MartinMo
  • Score: 2

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