Worst health cash crisis in a decade

John MacDonald, chief executive of the Oxford Radcliffe Hospitals Trust, believes a build-up of possible £6m debts, Government-set standards and new costs will combine to pose enormous problems next year.

Urgent talks will take place soon with Oxfordshire Health Authority and the NHS Executive to negotiate a three-year recovery plan to bring it back into solvency.

The trust - which is responsible for Oxford's John Radcliffe and Churchill Hospitals, the Radcliffe Infirmary and The Horton, Banbury - has predicted it will be £3.5m in debt by the end of this financial year.

And new working-time directives requiring back-pay for nursing staff could add another £2.5m to the bill. Mr MacDonald said: "Next year looks particularly tight. In fact, it looks like the worst year in a decade.

"It isdifficult to see how we can square all the requirements we are being asked to do - like waiting list targets - and balance the books within the allocation that the health authority has got to spend."

He insisted the crisis would not affect patient care but would instead involve cutting back on non-priority supplies and spending.

He said the trust was under enormous pressure to meet stringent Government targets on performance at a time when there was an increasing number of patients and big shortfalls in nursing staff. And he added that the trust had been working to establish a long-term strategy to ensure patient care was protected and developed. Short-term cash cuts would be extremely difficult without damaging the service to patients.

"We couldn't consider cutting the emergency side, because we have seen that it is already stretched to capacity. And we can't cut the elective side, because we wouldn't meet Government waiting list targets," he said.

Despite Oxfordshire Health Authority's 7.1 per cent budget increase for the next financial year, Mr MacDonald said five per cent would immediately be eaten by nursing salary increases. A rise in employer pension contributions would also add to the difficulties.

He added: "Very few people are going to argue with this Government's vision of the modern health service, but you are not going to be able to deliver that with current funding.

"In the last few years, we have already made annual savings of two to three per cent, but we don't think this is sustainable for much longer. We need financial flexibility to be able to run at a deficit for a few years, or the Government must give us more money.

"And if we don't get extra funding, we are really going to start to worry and maybe look at cutting some of the Government policies we are meant to be keeping to."

Story date: Thursday 17 February

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