Savings required at Preston and South Ribble hospitals will add to local NHS challenges

Posted on - 2nd July, 2024 - 7:00am | Author - | Posted in - Health, Preston News, South Ribble News
Royal Preston Hospital Emergency Department Pic: Lancashire Teaching Hospitals NHS Foundation Trust
Royal Preston Hospital Emergency Department Pic: Lancashire Teaching Hospitals NHS Foundation Trust

The trust that runs the Royal Preston and Chorley and South Ribble hospitals has brought in what it describes as “specialist support” in order to achieve a £58m savings target.

That is the spending cut Lancashire Teaching Hospitals NHS Foundation Trust (LTH) is aiming to deliver during the current financial year – and it comes on top of the £36.9m reduction in costs the organisation generated in 2023/24, the most it has ever managed to save in a 12-month period.

The figures are contained in a briefing sent to stakeholders last month, which has been seen by the Local Democracy Reporting Service (LDRS).

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The document – issued before the general election was called – stresses that the budgetary belt-tightening is part of a three-year plan to ensure not just “financial stability”, but also “quality improvements”.

However, its authors – chief executive Silas Nicholls and chair Peter White – warn, in the short term, of ”a number of additional controls around vacancies, agency and bank spending and tight restrictions on non-pay and discretionary pay items which will be challenging for our colleagues”.

Agency staff are employed by third parties, not the NHS, and are used to cover gaps in rotas – but come at a premium to the trusts that rely on their services.

The scale of the financial challenge facing LTH is underscored by the fact that even if it reaches its £58m savings ambition by the end of 2024/25, its books would still not be balanced – and a £24.3m deficit would remain.

It comes against the backdrop of the budget pressures confronting the NHS as a whole across Lancashire and South Cumbria.  Last month, the region’s Integrated Care Board revealed that the health system ended the 2023/24 financial year with a deficit of £148.6m – in spite of having saved £240.7m during that timeframe.

In the LTH briefing – which was sent to partner organisations and MPs – the trust’s two most senior figures explain that they are drafting in “short-term specialist support to help us identify areas where saving[s] can be made and develop sustainable and credible cost improvement plans”.

The pair pay tribute to the “huge effort” made by staff so far to help improve the financial position – and also acknowledge that the two hospitals for which they are responsible are experiencing increased demand for patient services.

They wrote: “Whilst all trusts are affected by this situation, it’s particularly pertinent to Lancashire Teaching Hospitals, as the cost of delivering our services and delivering patient care has been greater than the income received for a number of years now, resulting in a significant gap in our finances.

“In addition to a widely publicised increase in demand for Emergency and Urgent Care services, we have had inflationary cost pressures, high numbers of patients in high-cost hospital beds who instead require social care or home care support, a dependency on high-cost agency in medical and hard to recruit roles and structural challenges in funding arrangements which do not reflect the costs of service delivery – these have all had an adverse impact on our financial position.”

The LDRS understands that a significant contribution to the savings achieved by LTH last year came from the move to create a new discharge unit in the Finney House care home in Deepdale.   That has been used to accommodate those patients who no longer need to be in hospital, but are awaiting the support needed to return to their own home or to move into a residential or nursing facility.

The scheme, launched in November 2022, has enabled the closure of almost 60 costly hospital beds across the trust as it tries to move back towards capacity levels seen before the expansions that occurred at the height of the pandemic.   The easing of the discharge bottleneck at the ‘back door’ of the hospitals is also designed to help maintain the flow of patients through the system from the ‘front door’ at A&E.

It is understood that an aim to generate savings from procurement – how the trust buys goods and services – will form a key plank of how LTH seeks to achieve its £58m savings aim by next March.

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