Latest document issued to staff at Pennine Acute NHS

The author of the latest document issued to staff at Pennine Acute NHS regarding the financial deficit and the plans to cut up to 800 posts blames inherited financial deficits and a change in the way these are paid for the difficulties the Trust now finds itself in. The document also tries to make the case for separating the recently agreed £500,000 payment into the former Trust Chief Executive's (Chris Appleby) pension fund from the current financial situation.

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The document:

KEY POINTS

The Trust’s Board is to discuss the budget on Tuesday, 9 May. Staff briefings were being arranged about our financial position – however, this info was leaked to the BBC in advance, so we have brought our plans forward.

The Trust is facing a substantial deficit for three reasons.

There have been changes in the financial regime of the NHS with the expansion of Payment By Results to cover more services. As our reference costs on PBR are higher than the national average (108 against 100), we have higher costs than the new income level.

Cost pressures in the NHS are constantly rising, and our increased costs in 2006/07 have not been covered by an equivalent increase in the tariff under PBR.

We have always had a recurrent underlying deficit, which was addressed through brokerage (a system of agreed additional repayable funding). This is no longer available.

We are carrying out a review aimed at addressing the deficit – this will look at increasing efficiency and reducing costs, but, as 70% of costs are related to staff a reduction in the number of posts is inevitable. posts.

WHAT WERE ARE NOT SAYING TODAY IS THAT WE ARE MAKING 800 PEOPLE REDUNDANT – WE CURRENTLY ESTIMATE THAT 800 POSTS MAY HAVE TO GO.

Once we have detailed proposals then we will share them with staff – this should be a period of weeks, not months.

POSTS/STAFF

Why are you saying 800 posts rather than 800 jobs?
Because we’re talking about posts. For example, if we don’t recruit to a vacant post then that is a reduction of a post without anyone losing their job. We won’t know the actual impact until we have carried out our review.

But there could be redundancies?
There could be. We will do everything possible to avoid them through efficiency gains and other savings, and we would seek voluntary before compulsory, but we cannot rule them out.

Will nurses and doctors be included in the review?
As always with the NHS, we will focus on non-clinical posts initially, but we cannot rule them out. We must consider all posts in the Trust.

Won’t this announcement send morale through the floor?
We’re sure that it will, but we want to be as open as possible with staff about both the situation we face and what we are doing about it. We recognise that this will create a period of great uncertainty for all staff, which is why we have promised to progress the work to identify potential efficiencies and savings quickly. We will then be in a position to set out directly to staff what this will actually mean for them, and bring certainty as soon as possible.

How long will that take?
We don’t have a specific date, but would anticipate it being weeks, not months before we can set out the plans.

What about the unions?
We have already briefed union reps and the consultants’ LNC reps on the position and will be meeting formally with them throughout this process. This will include activating the formal framework for consultation on potential redundancies, which lasts for 90 days.

How will staff know what’s going on?
We are arranging briefings at each hospital for the ward managers, heads of department and the consultants who lead our clinical teams. The medical director is also writing out to all consultants in the organisation. We have established a system for staff to ask questions at any time in relation to this work (see under ‘other questions’), and we promise to use a wide range of communications mechanisms to keep staff informed.

Why didn’t you tell staff first – I heard this through the media?
The budget will be set by the Board on Tuesday, 9 May, and we had planned staff briefings to link with that. However the story was leaked to the BBC on the late afternoon of Thursday, 4 May. We immediately circulated an all staff memo and arranged briefings on each site for Friday, 5 May.

SERVICES

Will the number of beds be reduced?
We couldn’t rule that out, but this would be a consideration alongside all other options. The challenge would be to ensure that our efficiency improvements could provide the capacity we need for patients.

The women and children’s review and the adult services review finish their public consultations on Friday, 12 May – how does all this affect them?
The PCT committees who will make the decisions will have to consider all the responses and facts before they make their decisions. Our position is obviously one of the things they will consider. The consultations have always made it clear that they would not be about saving money, but about arranging services so that they are safe, high quality and sustainable.

FINANCES

You say there’s a £21.3 million in-year deficit, and a £28.3 million underlying recurrent deficit – what does that actually mean, and why are the numbers different?
A deficit is the amount of money by which our costs exceed our income. The in-year deficit is the amount of additional money which we will need to balance our budget this year, after we predict the impact of the issues we have outlined. The underlying recurrent deficit is a similar calculation projected for ongoing years. The figures are different because we have received additional funding to support us for this year (2006-07) as part of Payment By Results.

We’ve run cost reduction programmes (CRES) annually, and always done our bit – so why’s the situation so bad?
The Trust has had annual CRES, and staff have worked hard to find savings. The work of staff in delivering CRES has not been wasted – without it, our financial position would be more serious. The main issue is that the NHS financial framework has now changed – we can no longer balance the books as we previously did.

Why can’t we use capital monies to address the deficit?
This practice in the NHS was removed several years ago. Within the Trust we have recently seen major capital investment, including a £1.8 million education centre at Bury. Over the past four years we have invested nearly £15 million in new medical equipment for our hospitals, £11 million in ward/department upgrades and £6 million in IT systems. We have also attracted investment from the Strategic Health Authority - more than £2 million for MRI scanners at North Manchester General Hospital and Rochdale Infirmary in the last few months, for example, along with the £1.8 million central pathology lab at Oldham.

EFFICIENCY

How would greater efficiency help us with finances?
Under ‘Payment By Results’, hospitals receive a set amount of money for each completed procedure for a patient. The amount paid is calculated against a national average, given a rating, called a ‘reference cost’ of 100. Pennine Acute Trust’s over-all reference cost is 108, meaning that the average procedure costs 8% more than the national average. This rating indicates that we should be able to increase efficiency, which would lower the cost of treating the patient. As it stands, because of those higher reference costs, the money we receive under PBR doesn’t fully cover our costs.

It’s all right to talk about greater efficiency, but if you discharge more quickly, then won’t you increase the risks to patients?
No compromise will be made on patient safety. The discharge of a patient is a clinical one and, where the patient has social care needs, we work very closely with social services. What we are talking about is reducing the chance of delaying discharges unnecessarily. We know that, in the past, this has happened, and we want to minimise this. We believe that patients will welcome knowing that they are going home as soon as possible.

This builds on work we have already been doing in wards and departments across the Trust. The average stay for patients in both planned and unplanned procedures already been reduced as indicated:

Average length of stay per patient episode: