Hospital needs to find £50m savings

THE full scale of the financial crisis gripping Ipswich Hospital emerged last night after auditors claimed bosses need to find savings of nearly £50million.

Yesterday the hospital announced plans to axe 357 jobs, up to four operation theatres and 71 beds as part of a series of cost-cutting measures.

Now it has been revealed the hospital needs to save £48.8m to recover debts built up over a number of years. It had originally been given until March 31 next year to find the cash but has since applied for an extension until 2008.

The massive figure was highlighted in an audit of the hospital released yesterday, which has called for urgent action to improve its financial management.

PriceWaterhouseCooper, which carried out the audit, has referred the cash crisis to Health Secretary Patricia Hewitt saying the hospital's vast debts represented “unlawful expenditure”.

But hospital spokeswoman Jan Rowsell said £48.8m was a false impression of the true debt.

“We feel this is a hypothetical figure because it is based on us doing nothing and we are already finding savings,” she said.

“If we carry on spending as we are then we will be £48.8m in debt by the end of the year. We acknowledge that we have to take action immediately and are doing that. By November, we want to make sure we break even every month.

“We applied for an extension to find the savings because we don't feel we will achieve them within that timescale.”

Yesterday, hospital chief executive Andrew Reed admitted the scale of savings required represented a risk because of the short time within which they were being demanded.

But he claimed patient care could be improved as a result, despite saying further cuts are likely.

He said: “The plan represents some challenging proposals and they are not without risk.

“I can understand the anxiety and we will do as much as we can to talk to patients and staff to assure them that we believe we can cut costs and improve services at the same time.”

Mr Reed said further cuts are likely as hospital bosses continue to search to reduce their spending.

He said: “This is not the end of the process. With the financial situation we face, we need to continue to generate new savings ideas.

“It's a mark of the constructive approach that staff have taken across the organisation that they are continuing to generate ideas for this.

“It's a challenging plan but it's one that we believe will put the hospital on the road to recovery. What we're trying to do is rectify some of the problems the hospital has experienced for some time.”

Mr Reed said some of the buildings to the north of the 46-acre hospital site, used as wards for the elderly, could be demolished as part of the cost-cutting plans, with services transferred to the south end and focused around The Garrett Anderson centre currently under construction.

The plans will now begin to be implemented but all affected staff will undergo a consultation period of at least 90 days. Mr Reed said he did not anticipate many compulsory redundancies.

mark.bulstrode@eadt.co.uk