£5m debt crisis in Lothian hospitals

Published on 27/07/2001 01:00

Health chiefs in Lothian are facing a cash crisis which could see jobs axed and patient care cut.

Lothian Health University Hospitals NHS Trust has been ordered by the Scottish Executive to trim 5.2 million from its spending as it threatens to run over budget.

But health chiefs today branded the demand as "unrealistic" and warned they were being forced to look at a swathe of cost-cutting measures to meet their financial targets.

One health council member said it was hypocritical that the Executive could allow the cost of the Holyrood parliament to spiral out of control while demanding that cuts to health services be made.

Among cuts being considered by the Trust’s board are "appalling" plans to get rid of at least 15 specialist nurses - sparking fears that patient welfare and staff jobs will suffer. Other proposals could see the closure of city hospitals, including Liberton Hospital, the Royal Victoria Hospital or the Chalmers Hospital.

And health chiefs today admitted that they had considered mothballing a new 40m Edinburgh hospital wing as their "best" option. That suggestion - which outraged staff and patient groups - was vetoed by the Executive, and staff have now started moving into the new theatre block which will open as planned.

The crisis has been helped to an extent by Lothian Health, which has given the Trust a 2m one-off handout, but 3.2m of cuts will still have to be made. The Executive has reportedly told the Trust that it is "incredible" that it cannot find the savings - which it is legally bound to do - and accused chiefs of failing in their duties if they can’t show evidence of action by next month to meet the shortfall by the end of March 2002.

But the Trust today reported additional overspends of nearly half a million in the first three months of this financial year - on top of the 5.2m debt - as managers struggle to keep within budgets.

And health chiefs accused ministers of being totally unrealistic and jeopardising healthcare by demanding that hospitals meet short-term deadlines to keep budgets down and cut waiting lists simultaneously. In the past three years the Trust has battled to save 20m including a 4.3m deficit revealed earlier this year threatening up to 200 jobs.

Health chiefs also revealed that delayed discharge is soaring in Lothian making their task virtually impossible, with 208 beds blocked at the latest census this month.

Patient groups and opposition MSPs today backed health chiefs, laying the blame for the current cash crisis firmly at the door of the Executive.

Barry Sealey, Trust chairman, said: "The best solution that the management executive came up with was to delay moving into the Anne Ferguson Building but it seems completely back to front from what we should be doing.

"The Executive does give us more and more money but we need even more money on top of that to cover things like the New Deal for Junior Doctors."

Trust chief executive Allister Stewart said: "The Executive has made it very clear that we have got to balance the books within the year and deal with waiting lists. They have said we are legally bound to do so and we must not go away and come back and say it is difficult.

"They say they find it incredible that a 700m outfit cannot find 3.2m savings and have made it clear that we will be seen to have failed in our duties if we don’t go back to them when we meet again in August and show evidence of actions against the options."

Isabel McCallum, Trust director of nursing, said: "We’re looking at which specialist nurse posts could be removed with the least impact on patient care. But losing these nurses will inevitably have a significant effect on the quality of care."

Trust board member Bill Stewart said: "My worry is that we could be starting to take out of the service what it should be all about. Taking specialist nurses is appalling."

Clive Davies, a Lothian Health Council member, was at yesterday’s board meeting when members spelled out the problem.

He said: "I fully support the Trust. The Executive says it gives lots of cash but it does not ever say how much is actually needed. It is only doing half a job. It is displaying arrogance and a lack of understanding of the problems.

"They throw more and more money at the Holyrood project but the Trust who have got the new ERI and the Anne Ferguson building are not allowed to go out of step." Health convener and Liberal Democrat MSP for Edinburgh West Margaret Smith also said she sympathised with the Trust.

She said: "I don’t think we should be looking at it short term. The Executive should show some flexibility and give time for the deficit to be looked at long term."

In May NHS Lothian was projecting an overall 9.2m deficit which the Lothian University Trust has been charged to meet.

The Trust has secured provisional agreement from the Executive to use the proceeds from the sale of the Edinburgh Royal Infirmary site to meet 4m of the deficit caused by non-recurring costs for moving the ERI to Little France. The remaining 5.2m is a recurring overspend which the Trust must meet.

Delaying opening the Anne Ferguson Building until next year was expected to have brought 2.6m. Detailed plans on cutting 15 specialist nurses to save 180,000 this year are being drawn up in the next fortnight.

David Nicolson, Trust acting director of finance said: "We’re clearly uncomfortable about the way this is going about three months into the year. Because 20m in savings has already been taken from the system it’s very difficult to find any other way to save money."

Fellow board member Professor Gavin McCrone said the Trust should write to the Executive spelling out the risk to patients as bedblocking exacerbating the threatened overspend.

He said: "If we’re required to balance the books when costs are going up above inflation and increase output to address waiting lists as well at the end of the day patient care is likely to suffer."

A spokeswoman for Lothian Health Council criticised the Executive for not providing an adequate budget for the Trust and warned against quick-fix solutions. She said: "We recognise the pressure that further spending cuts will put on staff and patients and we have real concerns how this may affect patient care.

"We commend the Trust for its openness and hope the public understands the financial expectations placed on the Trust."

But Trevor Jones, chief executive of NHSScotland, defended the Executive saying it had reduced NHSScotland overspends "very substantially" from 20m to 3m. He said Lothian Health was getting 663m from the Executive this year - "more than twice the rate of inflation."

He said: "We are working closely with the Health Board and Trust to ensure that services are managed within the resources available to them. We have been reassured by the Trust that the Anne Ferguson building will open in the very near future, as planned.

"We will be meeting with the Health Board and Trust in Lothian next month to review their financial plans for this and future years."