Hospitals halfway to plugging £80m deficit

Bosses at Newcastle Hospitals promised to protect frontline services as they looked to plug the deficit

Hospital bosses at a trust believe they are halfway to plugging an £80m cash shortfall.

The Newcastle upon Tyne Hospitals NHS Foundation Trust recently warned that it was facing serious financial trouble after failing to make sufficient savings.

City councillors have now been told that cost-cutting plans have managed to slash the estimated deficit for 2024/25 from £80m to £40m.

The trust previously said that savings would be made through removing waste and getting better value for money on contracts, and that redundancies were not under consideration.

The trust runs the Royal Victoria Infirmary and Freeman Hospital.

Trust chief executive Sir James Mackey reported in March that it was at risk of running out of money this September had it continued at its previous rate of spending and that bosses were working "rapidly to address that situation".

Balanced budget

Rob Harrison, the trust’s new managing director, told Newcastle City Council's health scrutiny committee on Thursday that bosses were hoping to get "as close as possible" to a balanced budget and that there was a "clear focus on doing it without affecting direct patient care".

Mr Harrison outlined how the problem had arisen, as the trust was meant to deliver £33m in recurrent savings during the previous financial year, but had only managed to find £6m of repeating, year-on-year savings and had been forced to rely on one-off cuts to balance the books instead.

Mr Harrison said the trust was "focused" on protecting frontline services, according to the Local Democracy Reporting Service.

"There are efficiencies we can make in clinical areas, but that is not the same as cutting those services," he said.

Suggesting that some buildings could be closed down to cut costs, he added: "We are looking at the estate we use.

"Buildings cost money and if there are opportunities to change how many buildings we use and keep their services, but run them in a different way, then we are going to look at that."