Health Trust makes £42m recovery after huge deficit (From This is Hampshire)

Health Trust makes £42m recovery after huge deficit

1:10pm Tuesday 6th May 2008

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IT is an astonishing turnaround in fortunes on a multi-million pound scale.

Two years ago the trust in charge of Southampton's hospitals was branded a financial basket case with losses totalling almost £24m.

Cuts to hospital services were being made on a vast scale with more than 600 job losses and over 100 bed closures.

Southampton University Hospital's NHS trust was financially one of the worst performing in the country and was stripped of a star in the Government ratings.

But today hospital bosses have revealed an amazing financial upturn with the announcement they are sitting on an £18m surplus.

The dramatic swing is being hailed as the result of some tough financial decisions taken when the trust was staring into a financial blackhole with multi-million pound efficiency savings being made.

The overhaul of finances was led by a Government hit squad that was drafted in, coupled with a £25m loan from the Department of Health, to cover deficits for the preceding three years.

Now the trust, which has a turnover of more than £388m and employs about 7,500 staff, says it has made a surplus for a second year running after breaking even last year with a £2.2m surplus.

Chief executive Mark Hackett said this year's forecasted figures have been made as the result of £21.9m savings throughout the year.

"Our vision is to offer world class care by creating a surplus that will allow us to invest in the things patients are telling us they want to be improved. At the same time we will pay off our previous debt to taxpayers and ensure the hospital is in robust health financially into the future."

Savings at a cost

But according to front line staff the savings have come at a cost. Royal College of Nursing representative Steve Barnes said: "It appears we have gone from famine to feast and I am not sure staff would feel very comfortable with that. Staff have been through considerable pain and difficulty over the past two years with the threat of redundancy and staff and services being cut to the bone. To say that we are not only balancing the books but now have an £18m surplus is obscene really.

"We are just starting to get concerns coming through about the sort of overtime that is being offered on some units in order to adequately cover shifts."

Unison health spokesman David Prout said: "How have they moved from debt to savings without it affecting the public's care?

"Costings for each treatment are what is being measured rather than rounded long-term health care. If they have made savings it can only be through something they have not done."

The extent of the dire financial situation first came to light in 2005. the Daily Echo reported how hundreds of jobs would be lost and wards closed as bosses tried to balance the books. A leaked letter from Mr Hackett at the time outlined a £14m "black hole". Local politicians blamed bad management and underfunding and pledged to monitor the hospital's finances closely.

Today Labour MP for Southampton Test Dr Alan Whitehead congratulated the hospital's turnaround. "Since the problem came to light in 2005 I have stayed in close contact with the hospital and have had regular meetings with the chairman and chief executive. I think they should be congratulated on the turnaround that has been done in a dedicated and imaginative way.

"They have planned ahead carefully and put in place sustainable savings by looking at the systems in place and reconfiguring some which has led to savings. Back then it was very much a case of them robbing Peter to pay Paul."

The trust's savings plan included reducing the amount of time patients spend in hospital, cutting unnecessary admissions, improving the day surgery service and slashing repeat outpatient visits.

It also included striking better deals on the products, drugs and therapeutic devices they buy and better use of computer systems to reduce the amount of time staff spent on certain tasks and reliance on paper processes.

The savings have been made while also employing new staff. The hospital confirmed that the trust had taken on 250 extra staff during the past year while continuing to make savings in other areas.

The new staff included 130 extra nurses, 20 doctors, 40 scientific and therapeutic staff, and 60 support staff.

Lib Dem spokesperson for health MP Sandra Gidley whose Romsey constituency takes in parts of Southampton said: "I would say well done to the trust for this remarkable turnaround as clearly savings have been made while still investing in the hospital. However, I would question whether this is in fact a surplus when they still have a £25m loan to pay back to the Government."

The trust insists it will remain prudent with its new found surplus. About £6.1m will be used to pay back the first instalment of its £25m loan, with the rest of the loan repayable over the next two years.

There is no good news for patients and visitors who use the hospital's car park though as bosses ruled out a review of controversial charges. A spokesman confirmed that none of the surplus was earmarked to lower or scrap the charges that have been branded a tax on the sick by critics.

Instead the remainder of the money will be spent on improving wards, with new bathrooms and more privacy, including single rooms and more single-sex accommodation, new outpatient clinics and four new operating theatres.

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