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Health Trust makes £42m recovery after huge deficit
1:10pm Tuesday 6th May 2008
Comments (23)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."
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.
Your Say YourThis is Hampshire
hulla, baloo says...
9:30am Tue 6 May 08
Unless management changes,I can see this surplus soon being lost and another deficit in the making.
pepe, Chandler's Ford says...
9:34am Tue 6 May 08
hmm, says...
9:55am Tue 6 May 08
pepe wrote:A bit like the cost of your haircuts then
So now the Trust can stop the ridiculous parking charges
James, Southampton says...
10:25am Tue 6 May 08
Is this because you've done a detailed and far reaching analysis of the situation or because you can't bear to see good news and like to talk the country into depression to shed a better light on your own inadequate life?
In the know, says...
10:46am Tue 6 May 08
hulla wrote:The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.
hulla, baloo says...
10:55am Tue 6 May 08
James wrote:Maybe because the management who oversaw the deficit, implemented the job cuts and ward closures, are still in their jobs.
Hulla writes:- "Unless management changes,I can see this surplus soon being lost and another deficit in the making." Is this because you've done a detailed and far reaching analysis of the situation or because you can't bear to see good news and like to talk the country into depression to shed a better light on your own inadequate life?
The usual practice of business, is those at the top usually stay, no matter what their performance.
I do like to see good news, but not off the back of mismanagement that has caused misery to others.
hulla, baloo says...
10:59am Tue 6 May 08
In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list.
hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.
In the know, says...
11:01am Tue 6 May 08
hulla wrote:Waiting lists are always too long - no one likes to wait for treatment. By missing targets, with lists too long or too short, yes too short, the Trust runs into trouble.
In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list. Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
hulla, baloo says...
11:10am Tue 6 May 08
In the know wrote:Why does the trust run into trouble?
hulla wrote:Waiting lists are always too long - no one likes to wait for treatment. By missing targets, with lists too long or too short, yes too short, the Trust runs into trouble.In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list. Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
James, Southampton says...
11:10am Tue 6 May 08
Really? Another example of the same attitude, I'm afraid.
In the know, says...
11:18am Tue 6 May 08
hulla wrote:Too short and they are accused of forging the figures. Too short and they are accused of spending too much in one area of clinical care. The Government waitings lists assume a one size fits all.
In the know wrote:Why does the trust run into trouble?hulla wrote:Waiting lists are always too long - no one likes to wait for treatment. By missing targets, with lists too long or too short, yes too short, the Trust runs into trouble.In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list. Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
hulla, baloo says...
11:28am Tue 6 May 08
In the know wrote:Can see the logic in that, from a business point of view, but from a patient point of view, a short list is ideal.
hulla wrote:Too short and they are accused of forging the figures. Too short and they are accused of spending too much in one area of clinical care. The Government waitings lists assume a one size fits all.In the know wrote:Why does the trust run into trouble?hulla wrote:Waiting lists are always too long - no one likes to wait for treatment. By missing targets, with lists too long or too short, yes too short, the Trust runs into trouble.In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list. Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
Makes one wonder where the priority lies.
nhs worker, Soton says...
11:50am Tue 6 May 08
Happy staff = happy patients !
Paramjit Bahia, Southampton says...
11:56am Tue 6 May 08
hulla wrote:In our materialistic world priority will always be profits, and people will always be last.
In the know wrote:Can see the logic in that, from a business point of view, but from a patient point of view, a short list is ideal. Makes one wonder where the priority lies.hulla wrote:Too short and they are accused of forging the figures. Too short and they are accused of spending too much in one area of clinical care. The Government waitings lists assume a one size fits all.In the know wrote:Why does the trust run into trouble?hulla wrote:Waiting lists are always too long - no one likes to wait for treatment. By missing targets, with lists too long or too short, yes too short, the Trust runs into trouble.In the know wrote:But waiting list times were also reduced by creative accounting, in as much as many trusts opened another waiting list for those to go onto the waiting list. Yes, I agree the cuts went too far, which has a knock on effect into patient care. I do wonder if the waiting lists are now increasing again because of staff shortages and ward closures.hulla wrote: Poor management led to the large deficit in the first place. So by cutting jobs and closing wards, affecting those most needing, and working in the hospital,why are they called saviours, unless it is their own backsides they have saved. Unless management changes,I can see this surplus soon being lost and another deficit in the making.The large defecit was caused because patient care was increased particulalry to reduce waiting list times. This allowed a certain backlog to be cleared. The knee jerk reaction to that defecit was to then cut some areas too far, losing experience and valued staff. Hopefully the management will carefully select where to spend this so called surplus. Reducing waiting lists further probably isn't on their radar as they have met many Government targets already.
Your analysis of bosses is spot on.
The surplus will more than likely be used for providing even more comfort for senior bosses but needs of the medical staff are likely to be ignored.
I can imagine Bevan turning in his grave on finding out that his creation has become a target driven pen pushing monster which pays very little attention to what doctors and nurses are saying.
Have a good day, try to stay away from A&E. It will help to reduce that Q
Brian, Soton says...
12:30pm Tue 6 May 08
Condor Man, Southampton says...
12:52pm Tue 6 May 08
If the private sector pays better then let them take their chances.
Redfield, Winchester says...
3:16pm Tue 6 May 08
Ammie, Southampton says...
3:46pm Tue 6 May 08
J. Moorby, Southampton says...
4:59pm Tue 6 May 08
Clara
Peter, Southampton says...
6:16pm Tue 6 May 08
J. Moorby wrote:That is exactly what external and internal auditors do. Every NHS body has a comprehensive programme of audit every year. External auditors are not appointed by the Trust, and have full access to each and every part of the accounts. What exactly are you suggsting that the Trust are doing with their accounts?
I have a profound distrust of the Trust's book keeping. I would be more convinced if the City employed Accountants employed on our behalf to thoroughly go through their books including the payout to these men. So called Trusts and Managers put therein are in for themselves - I feel a chill go down my spine because it is all about private control. Just wait and see. Clara
hulla, balloo says...
7:57pm Tue 6 May 08
Worried, Southampton says...
11:54am Wed 7 May 08
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Fred, says...
9:23am Tue 6 May 08
This is actually a bad idea. The medical staff should be deciding how to spend this money in further improving patient care.