South Tees Hospitals NHS Trust could face £50m deficit

The body that runs a group of Teesside hospitals has revealed it is facing a large funding shortfall.

If the situation at South Tees Hospitals NHS Foundation Trust does not improve, the financial black hole could reach £50m over the next two years.

The trust has hired management consultants to help cut costs and has not ruled out job losses.

Health services watchdog Monitor is currently investigating the way the trust is managed.

The trust said it expected to take a £29.5m budget deficit into the next financial year, which could spiral to £50m by 2015-16.

Its chief executive Prof Tricia Hart said: "It would be disingenuous of me to say at this stage that there might not be some (jobs) lost, but we have a track record of keeping those to an absolute minimum."

Mark Clifford, from Unison, which represents many NHS workers, said he was concerned for his members working for the trust.

"In terms of the deficit, what we're seeing is a product of Tory government cuts," he said.

'Set up to fail'

The trust has hired management consultancy firm McKinsey to advise on saving money, a move criticised by the Royal College of Nursing (RCN).

RCN operational manager Estephanie Dunn said: "As McKinsey make more and more money out of a dwindling NHS budget, the budget for front-line services gets less and less.

"This is, to say the least, highly questionable."

But the trust's director of finance, Chris Newton, said McKinsey's experience was "enormously valuable to us".

"We don't have a monopoly on all the best ideas, best practices, across the country and across the world," he said.

Monitor's investigation into governance at the trust is expected to take one or two months to complete.

Possible outcomes include a negotiated recovery plan or the regulator forcing the trust to take whatever action it feels is necessary.

Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, said he intended to raise the trust's finances with Health Secretary Jeremy Hunt.

He said: "The trust provides excellent care in the main. My suspicion is that they've almost been set up to fail by the government's finances."

The Department of Health said: "Because the government has taken difficult financial decisions, we have been able to increase the NHS budget to support the NHS in meeting increasing demand and the needs of an ageing population."