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Hospital services at risk as millions cut from budgets
Anna Davis13.05.09
Tens of millions of pounds are being cut from London hospital budgets in the first sign of sweeping reductions in public spending.
At least one leading trust is losing more than £9 million as the Government seeks “efficiency savings” across the NHS. But many other trusts are unaware they are set to lose part of their London weighting allowance over the next two years.
It comes after Chancellor Alistair Darling unveiled billions of pounds worth of public spending cuts in last month's Budget, including plans to save £500 million by discharging patients from hospital sooner.
Dr Kevin O'Kane, from the British Medical Association, said: “No one wants to see reduced funding. Doctors must be involved in deciding where these cuts should be.”
Campaigners warned the cuts will mean patient services are squeezed as hospital bosses are backed into a corner by the Department of Health.
Geoff Martin, spokesman for London Health Emergency, said: “We are already struggling to maintain services on the current budgets and this will result in service reductions. What is worrying is this could be the first swing of the axe as the Government looks to cut public spending.”
The cuts are so stark that government officials have capped the amount each hospital can lose in a year, and allowing changes to be introduced gradually.
David Sloman, chief executive of Whittington Hospital, said his trust will lose £4 million this year, and £5 million in 2010/11. He has been forced to abandon a bid to become an independent foundation trust — despite spending £100,000 on the project.
He said: “The changes have affected all hospitals, but we have seen the biggest percentage change. We are looking to deal with this through efficiency savings.” Hospitals are given “top-up” payments by the Government to acknowledge the costs of operating where staff, land and materials are expensive. But under the new plans the payment — called the “market forces factor” — will be cut.
The Department of Health claims this is because costs are falling in the recession. A spokesman for NHS London said: “In total London's trusts are forecasting a small loss of income in 2009/10 of less than one per cent compared with their total planned turnover of £7.5 billion. We will continue to performance-manage trusts.”
How the high-cost area allowance is worked out
The “market forces factor” is used to decide how much extra money hospitals in expensive locations should be paid. Calculations are based on the amount each hospital pays for land, buildings and salaries.
It looks at the wages paid in the private sector in that area and works out how much each hospital should be reimbursed. Applied as a blanket formula, it is inevitable there will be winners and losers, and any changes spark debates over its fairness.
The formula came into effect last month and was designed to even out the figures. Before, neighbouring hospitals could have been paid vastly different sums.
Last year the formula gave the Whittington Hospital a 37 per cent “uplift”, but this will drop to 30 per cent next year and 23 per cent in 2011. This equates to a £4.2 million drop, followed by a £5.2 million drop in income.
The Royal Marsden's uplift will drop from 32 per cent last year to 25 per cent this year, while Chelsea and Westminster will drop from 40 per cent to 27 per cent. They were unable to say how much money this equates to.
Reader views (5)
Could save a lot by making the religions pay their own hospital chaplains and charging them rent for their offices and facilities.
- Harry, Leicester, UK
Maybe if we stopped spending tens of millions of pounds on hospital chaplains and asked the various religions to pay for their chaplains instead of the British taxpayer it would be a start to saving money in the NHS?
- James-C, Oxford, United Kingdom
How about getting rid of the places of worship within hospitals and using that to save a few extra lives. It's criminal that the churches gets funding in all walks of life, from prisons, to schools and hospitals while the people who really need the money are denied it. In a life or death situation, I'd rather have a doctor leaning over me and trying to save me than some god botherer leaning over me and trying to do the same.
- A Rowland-Stuart, Brighton, UK
and after all its more important to hand money to the car industry and bankers isnt it?
- Brian, Wiltshire
Well how can you pay for hospitals when you have country estates to maintain!
- Melvyn Windebank, Canvey Island, Essex
