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03.07.15

Monitor threatens FTs with loss of freedoms over efficiency savings

Monitor has threatened foundation trusts with the loss of “their cherished freedoms” if they do not make efficiency savings to bring down a deficit that threatens to reach £1bn a year.

The regulator warned the 152 FTs that they will come under increasing pressure unless they demonstrate faster improvements in productivity, including urgently adopting more radical ways of working.

David Bennett, the chief executive of Monitor, spelled out the stark challenge facing the NHS in a speech to the Healthcare Financial Management Association, which represents the finance directors of all NHS organisations. 

He told the audience that the latest forecast deficit from all FTs of £989m for 2015-16 is “unaffordable”, so essential savings must be made swiftly.

One of the problems he pointed out was that FTs in general had not used their freedoms to improve performance fast enough, and had been too slow to adopt best practice in efficiency.

He said that Monitor will clamp down further on poor financial and operational performance, including rating all FTs on a sliding scale for the first time.

Individual FTs will also need to cooperate with their neighbours and commissioners to organise services in the most efficient way possible, even if that sometimes means giving up the provision of some medical specialities to others.

Dr Bennett said: “I recognise that just because deficits mostly sit with providers doesn’t mean they are the only NHS organisations that need to up their game.

“Nevertheless, current plans are unaffordable, and all providers have to make a major contribution to efficiency improvements, even those who aren’t currently forecasting to be in deficit.

“This means hospitals leaving no stone unturned, and adopting best and better practice everywhere; avoiding unnecessary expenditure, and adopting new ways of working.”

He also warned trust managers that the FT model would have to adapt to circumstances.

“We have to do better, especially if freedoms are not to be completely eroded. We want to work with you to redesign patient services across organisational boundaries, where there may be some winners and some losers,” Dr Bennett said.

“We are not advocating the closure of vital hospital services, but we recognise that in some places they can be run better on a shared basis by trusts within a geographical area, for example through clinical networking arrangements.” 

Monitor is to act sooner over under-performance and demand faster responses. Trusts found in breach of their licence will be ranked according to the seriousness of their financial and operational problems, echoing the ‘special measures’ regime for inadequate care.

More practical support for FTs in difficulty has also been promised. The best performers are to help the poorest through buddying arrangements, and a pool of troubleshooters is to be assembled to turnaround struggling trusts. 

Dr Bennett also backed those FTs that were willing to take over the running of others in difficulty – although he warned it could take years to establish successful chains of hospitals.

(Picture: Dr David Bennett)

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