England’s biggest hospital trust is facing a £40million black hole in its budget for next year, it has emerged, capping a disastrous week for Andrew Lansley’s NHS reforms
Imperial College Healthcare Trust, which runs several well-known hospitals in west London and has a turnover of £910m, has also seen three senior executives announce their departure in the past few days. It is still desperately trying to balance its books and may yet have to announce job cuts, while a “hit squad” could be ordered in by the capital’s health authority to clear up its financial problems.
The news is yet another blow to the ambitious plans of Mr Lansley, the Health Secretary, to reform the NHS. Earlier this week he was humiliated as David Cameron and Nick Clegg announced an unprecedented “pause” in the passage of his flagship Health and Social Care Bill that could lead to substantial changes, following criticism from the public and the medical profession. On Thursday his Cabinet colleague Iain Duncan Smith, the former Conservative Party leader, said publicly that patient waiting times had increased over the past year as he delivered a petition to Downing Street opposing local hospital unit closures.
Mr Lansley's troubles will likely continue into next week as the Royal College of Nursing holds its annual conference in Liverpool. He will not make a formal speech to the meeting, the first time a Health Secretary or Prime Minister has not done so in eight years, but still faces a rough reception as he attends a seminar to hear what nurses think of his policies. Imperial’s financial problems will trouble the Health Secretary partly because it illustrates the difficulties the NHS faces in making savings of £20billion over the next three years, with many trusts already cutting posts and rationing services.
But Mr Lansley also wants all trusts to achieve Foundation Trust status by 2014, giving them more independence, which involves proving that they are financially viable and well-governed.
If Imperial - which runs Charing Cross, Hammersmith, Queen Charlotte’s & Chelsea, St Mary’s and the Western Eye hospitals – struggles meet the requirements to reach Foundation Trust status it means many more trusts are also likely to face difficulties.
According to the Health Service Journal, Imperial has published papers showing that current financial pressures will mean an underlying deficit for 2011-12, and despite a massive cost savings plan an “unidentified gap of £40m” between income and expenditure will remain. This is mainly because the Primary Care Trusts that currently provide its funding are cutting back on the treatment they commission.It has also missed a target of recording 13 or fewer cases of the superbug MRSA and has a backlog of patients waiting more than the desired 18 weeks for treatment.
Meanwhile the resignations of Steve Smith, its chief executive, Tony Graff, its chief financial officer, and the retirement of Alistair Shearin, its chief information officer, will make it more difficult for the trust to ensure it is managed well.
Imperial has been working with the consultancy Ernst & Young on its cost-saving plans and is still trying to finalise its budget and submit a balanced operating plan. If it is not approved by NHS London, the Strategic Health Authority for the capital, Imperial may have to apply for emergency funding from a body called the Challenged Trust Board and may have new directors imposed on it from above to turn around its performance.
Cymbeline Moore, head of public relations at Imperial, said: “The financial environment faced by acute trusts is extremely tough. The size and scale of cost reduction plans that large research-based trusts are being asked to make is very challenging. As with many of our counterparts, we are in ongoing constructive discussions with NHS London regarding our financial plans. We can confirm we are not in turnaround nor classed as a challenged trust.”
A spokesman for NHS London added: “There are always robust discussions at this time of year regarding hospital budgets. NHS trusts must agree their budgets and we are working closely with commissioners and providers of NHS care in London to make sure that their plans are credible and can be delivered. Imperial, like the whole of the NHS, is committed to managing constrained levels of funding, and using its budget more efficiently to meet demand for better services. The NHS in London is working hard to do this, while at the same time radically slimming down its management structures and managing the process of fundamental reform of the system.”
~from reuters
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