08 December 2006
England's biggest hospital trust has been told to draw up plans to save £11m this year and £38m in 2007/08.
The Leeds Teaching Hospitals Trust said the payment by results funding system had exposed inefficiencies in its delivery of services – the trust is 15% above the PBR tariff – and at the end of October it was £6.9m in deficit.
Without further action, which could include redundancies and service cuts, it expected to finish the financial year £11m in deficit.
Yorkshire and the Humber Strategic Health Authority said it had no plans to send a turnaround team into the trust, but has ordered the trust to produce savings proposals.
'These plans will inevitably involve a reduction in posts and a rethink about some of the services we provide,' said the trust's interim chief executive, Hugo Mascie-Taylor. 'It is too early to be specific about how many posts might be involved or to rule out the possibility of redundancies.
'However, at any time we have in excess of 400 vacancies so there is clearly scope to significantly reduce pay costs.'
The trust might also join forces with local primary care trusts to ask the SHA for financial support.
In an attempt to curb spending, budgets set by the trust at the beginning of the financial year have been suspended and replaced with new spending targets.
Previously, the trust had insisted that each vacancy be reviewed before being filled and it had clamped down on non-pay discretionary spending. But these measures had little effect in October – during the month the trust became £500,000 worse off.
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