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North Cumbria's hospitals bailed out - with £19m taxpayers' cash

North Cumbria’s hospitals will break even this financial year – but only thanks to a £18.7m bail out.

Alistair Mulvey photo
Alistair Mulvey

Details of the one-off funding package have been revealed to The Cumberland News just days before bosses are due to meet to discuss takeover bids.

The funding is coming from the region’s Strategic Health Authority (SHA) to ensure the Carlisle and Whitehaven hospitals balance their books, as is their statutory duty.

The hospitals are having to be acquired by another trust as a result of long-running financial problems and debt.

But as the current board prepares to name its preferred partner – the Cumbria Partnership/Newcastle Hospitals or Northumbria Healthcare – next week, finance director Alistair Mulvey explains it is not simply a case of leaving someone else to sort it out.

He told The Cumberland News that, like in any big business merger, the trust must demonstrate it has a financial recovery plan in place before the deal can go ahead.

As a result, Mr Mulvey explains that even after SHA funding support, meeting this year’s savings target – £15.2m by April – will be key to the takeover going through. Last week, a group of eight health unions united to call on the trust’s current board to resign – saying that cost-cutting measures were impacting on safety at the hospitals and leaving staff overstretched.

But Mr Mulvey, who admits the trust’s finances have given him sleepless nights, insists he would not do anything that impacted on patient care.

Having worked in the NHS for more than 20 years, he says this is because he genuinely believes in and cares about it.

However, Mr Mulvey adds that the stark reality is they have to look at how they can do things differently if they are to solve the trust’s financial problems for good – where possible making savings that will benefit the hospitals year on year.

He believes the reason things have become so bad is because successive management teams have not taken the necessary steps to cut back. Had they done so, he says the hospitals would be running far more efficiently and the cost improvement plan would not be so severe.

The £15.2m is a combination of a four per cent national savings target all NHS trusts have to meet, plus a further £7.2m because North Cumbria has failed to deliver savings over the past seven or so years.

To date North Cumbria University Hospitals NHS Trust has found about £8m of those required savings, meaning it will meet national targets but not clear previous debt.

Mr Mulvey says they now need to push on to find as much of the remainder as possible to make the trust an attractive proposition to bidders.

“For the residents of north Cumbria to get the best deal out of the acquisition they need to go into it on as strong a footing as possible,” he explains.

But with a total turnover of £220m, it is a huge chunk.

He explains that they are approaching it in two ways – on one hand looking at big structural reviews and on the other, looking for small departmental changes that will add up.

The most controversial of these is trust’s Nursing Review, which unions say will see staff downgraded and pay cuts.

But Mr Mulvey says they are actually looking at what skills are needed to meet patient needs in each department, and changing it accordingly.

“This trust spends £130m on staff a year. If you need to save money the biggest area you have got to look at is staff. The biggest individual staff group costs are inevitably nursing staff because there are so many of them. The next is consultants who are highly paid, then admin and clerical.

“We are basically looking at everywhere – as well as a nursing review there is an admin and clerical review, plus we are looking at catering, portering and domestics in Whitehaven and pathology has already undergone a review.”

He also praises staff across the Cumberland Infirmary and West Cumberland Hospital sites for continuing to come up with cost-saving ideas.

“All of these ideas are being driven from the shop floor. It might be small savings, like the changing from one particular brand to a standard one, but it makes a difference. ”

He adds: “The term ‘cuts’ is an interesting one. We are reducing how much we spend but there hasn’t been any service that’s been cut.

“If you look at the new telestroke service and heart centre, service provision is actually higher than it was – we are just not paying as much for it.”

Have your say

When an accountant leaves are they replaced immediately yet when a nurse or medical secretary leaves their job has to be reviewed by a panel that only meets monthly and will only consider a certain number of posts at each sitting. Consequently these posts can go unadvertised for weeks or months and unfilled for longer still.

It's a sad state of affairs when an accountancy post is filled with more urgency than a clinical post in a hospital.

Posted by nero on 28 January 2012 at 07:50

I agree with Me. The management ploy here is to put all risk on the front line staff. They expect them to manage with far fewer nurses working much harder looking after more and more patients. They expect the medical staff to save money by discharging patients quicker. When there is an error or mistake, it's that nurses or Doctor's fault not the "Trust".

Posted by Peter on 28 January 2012 at 07:23

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