Published: 08 June 2006
‘Halt job cuts’, MPs Told
The heavy cost of private finance initiatives (PFIs) and increasing reliance on ‘the market’ are the chief causes for the present financial crisis in the NHS according to Amicus Health.
In its evidence to the House of Commons Health Select Committee on NHS deficits, Amicus Health detailed a ‘cocktail’ of government initiatives (another appropriate drink-related ‘adjective / phrase’ that springs to mind is ‘name your poison’: Editor) that have contributed to the current situation, with thousands of healthcare jobs on the line and the risk of services to patients & clients being seriously affected.
Amicus, which has 100,000 members in the health sector, called for a moratorium on all job cuts while the committee carries out its inquiry and urged MPs to identify alternative solutions to the deficits, estimated at more than £600 million, saying:
“Amicus believes that a combination of debt incurred by PFI and historic debts, plus the new internal market mechanisms probably accounts for the lion’s share of deficits”.
The problem areas include:
· The PFI has meant that the extra cost of private finance having to be paid out of hospitals’ current income which also has to pay for staff and patient care. As a result, managers have had to cut services which, in turn, means reduced income.
Example: The extra annual cost of PFI for the St Bartholomew’s and London Trust will be over £48 million.
· The new Independent Sector Treatment Centres (ISTCs) are not providing ‘value for money’, with evidence that supply of these new services is outstripping patient demand.
Example: Twenty-eight primary care trusts (PCTs) in Trent and South Yorkshire signed a contract with Partnership Health Group (PHG) Limited; the value of which was £13.4 million in 2004-2005, although the actual patient use totalled £10.1 million – a loss of £3.3 million on operations which PHG never performed.
· ‘Top slicing’ is a crude mechanism for clawing back cash and penalises those PCTs not in deficit.
Example: Waltham Forest PCT has ‘top sliced’ its budget by £3 million, which linked to £4.1 million of deficits, resulted in proposed redundancies of 15 health visitors and school nurses, reducing the workforce from 42 whole time equivalents to 24.
Amicus also believes that two more initiatives – Payment by Results (PBR) and Practice Based Commissioning (PBC) – with their emphasis on moving money from hospitals to primary care have been ill-thought out and badly managed, further contributing to the deficit problem.
Amicus is against the ‘slash and burn’ tactics adopted by some NHS managers which is the opposite to the ‘joined up’ approach required for health service reform.
Example: Nottingham University Hospitals NHS Trust announced recently 1,180 job cuts, including 479 nursing and midwifery posts, and 75 pharmacists, cancer screeners and laboratory technicians.
Amicus is also concerned that cuts in mental health services are being targeted, despite these services being a government priority.
Example: Hertfordshire Partnership Trust is being forced to make 5% savings to help other struggling trusts in Hertfordshire, but has decided to focus on reductions in mental health, including an 11% cut in psychological services.
Assistant General Secretary for Amicus Public Sector, Gail Cartmail said:
“Our report to the Health Select Committee makes grim reading.
The situation in the NHS has gone beyond a mere ‘wake-up’ call - alarm bells should be ringing long, loudly and consistently throughout Whitehall and Westminster”.
Further information
CPHVA website
Amicus Health Memorandum of Evidence to the Health Committee-Inquiry into NHS Deficits
House of Commons Health Select Committee on NHS deficits
Payment by Results (PBR)
Practice Based Commissioning (PBC)
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