Hospital hit squads paid £6m

City workers are being paid millions to sort out hospital debts
13 April 2012

The role of Government troubleshooters for the NHS is at the centre of a growing debate. Researchers have found that hospitals and primary care trusts across the capital have spent £6 million hiring managers from leading City firms to help cut their yawning debts.

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The trusts report that the "turnaround teams" drafted in to aid "financially challenged" NHS organisations balance their books will help them save a total of £200million. Many say they will be debt free by the end of the financial year in April.

A spokesman for Queen Mary's Sidcup NHS Trust, in Bexley, which employed consultants from KPMG between January and March last year, at a cost of £296,000, said: "The turnaround process involved all members of staff working alongside the turnaround team to identify and implement our cost-saving measures.

"It has saved the Trust a huge amount of money. We have reduced our expenditure gap by 18 per cent without cutting any patient services, which is an amazing achievement.

"From a deficit last year of almost £20million, we are working towards a deficit budget this year of closer to £5million, a target we are well on track to meet.

"Moreover, our efficiency and effectiveness is going from strength to strength."

But some experts question the usefulness of the external teams - and say managers within the NHS should be able to solve their own problems. Typical advice from turnaround teams includes selling buildings, reducing agency staff and cutting the length of time patients remain in hospital beds.

Critics point out that some organisations with deficits have managed to pull themselves out of debt without outside help and have improved patient care at the same time.

Dr John Lister, director of pressure group London Health Emergency, said: "The standard thing is: come in, close something down and lay off some staff.

"All the answers are ones that any manager pursuing traditional policies would have provided. It seems strange that we should pay hefty fees to NHS managers when the first thing they do on hitting a problem is bring in someone more expensive to do the same job as they should be doing.

"Managers who get trusts into such dire financial situations should be obliged to get them out of them. Otherwise, why are we giving them so much money?"

But Nigel Edwards, Director of Policy at the NHS Confederation, which represents more than 90 per cent of NHS organisations, said some hospitals had more complex problems than others.

He said: "There is a combination of factors that help to explain why some NHS trusts in deficit are able to rectify the problem internally and others need external help. For example, the extent and complexity of the problem as well as the urgency at which it needs to be dealt with may be a factor.

"If the problem has existed for a long time and a solution has not been found internally then this may be another reason why the trust needs external advice."

A Department of Health spokesman told the Evening Standard: "Turnaround teams are offering valuable expertise and we are confident they are and will be saving far more than they cost.

"Estimates show that the average saving identified in the turnaround organisations is four per cent of their income.

"Both the National Audit Office and the Audit Commission have reported that the NHS needs to improve its financial management skills and that is exactly what we're helping them to do by sending in these independent experts. Improving financial management does not mean compromising services for patients.

"Any actions that the NHS takes to reduce deficits will not lower the quality of care provided to NHS patients."

The Department of Health first parachuted turnaround teams into the country's "most challenged trusts" in December 2005.

Such teams are now operating in 143 of the 293 hospital and primary care trusts across the NHS.

In 2005, external consultants charged the NHS across the country a total of £22million.

But despite the savings, London hospitals are reporting the financial position for the capital as a whole has deteriorated in recent months - final debts are forecast to rise from £90million to £135 million by March.

The total debt for the past financial year was £174million.

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