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Circle planned cut of 20pc of staff at Hinchingbrooke

Circle’s original business plan for its running of Hinchingbrooke Healthcare Trust outlined a cut in the hospital’s workforce of 20 per cent, a document shared with HSJ reveals.

The business case published last month said the private franchise operator had anticipated cutting its then 1,600 workforce by around 320 whole time equivalents - although this information was redacted in the publicly available copy of the paper.  

The company yesterday told HSJ the figure was based on a “paper scenario” at the “worst case end of potential scenarios” in which the trust would need to save £230m in 10 years.

Circle said it was unable to say how many jobs would be cut in reality or how much would need to be saved.

Responding to HSJ’s enquiry about the job cut figure, Circle chief executive Ali Parsa said: “It’s funny how some always just want to ‘catch Circle out’.

“The fact is the bid set a clear scenario with big assumptions: ‘Save £230m over 10 years where income is reduced and work is transferred to the community’.   

“Under that scenario, it’s only natural some staff would be transferred to the assumed setting where care had transferred.”

The trust currently has 1,433 staff and has released 77 posts this year, none of which have involved compulsory redundancies. The larger 1,600 headcount figure relates to the scenario Circle was given when it made its initial business case prior to taking charge.  

The figure was included in a document called Hinchingbrooke Next Steps Full Business Case Version 2.9 (see attachment), first reported on by a health sector blogger.

It was published by NHS East of England on 11 September 2012 but the publicly available copy redacted a substantial amount of information including the job cuts figure. The report contains details of Circle’s bid as well as details of competing bids from other commercial providers.  

HSJ has seen a copy without the redaction. It says (on page 107): “Circle anticipate a reduction to the current workforce of circa 1,600 whole time equivalents by approximately 320.”

It adds that the proposed reductions would be achieved in a three-year period, with cuts to non-clinical services accounting around 60 per cent of savings and the remainder coming from clinical support services.

Mr Parsa said that paper scenarios “rarely replicated exactly in real life” and that in the future “we could see together with the staff required far less dramatic changes to the shape of the workforce than the paper scenario”.  

Circle, which last month posted a £4.1m budget deficit, was chosen as the preferred partner to run Hinchingbrooke in November 2010.

Readers' comments (14)

  • Circle chief executive Ali Parsa said: “It’s funny how some always just want to ‘catch Circle out’.

    It's proving to not be hard work.

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  • Simon Burns, 10 Nov 2011: "Circle has said that it might need to redeploy and retrain some staff within the hospital, but it does not expect job losses."

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  • How many NHS Trusts and FTs have submitted similar forecasts though in the past? But we react differently to this news 'cos it's Circle.

    In this regard I agree with Ali Parsa, they are paper scenarios which do necessarily transpire.

    If Circle can achieve significant workforce redesigns, productivity improvements and changes in the settings of care, whilst improving quality, that's great in my book. Isn't that what this experiment is supposed to be about?

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  • Headline could have read 'Trust anticipates move to community of patients, staff.'

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  • All acute trusts have to plan to make significant reductions in their workforce costs. A mix of tariff deflation, commissioner plans to move activity out of hospital and increased wage bills courtesy of the national contract arrangements make this inevitable. So this is not really a story about Circle as much as the pressure all trusts are under .

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  • We've had the bonfire of the QUANGOs, now watch a Guy Fawkes special bonfire of the privatised.

    Every night will be firework night if the government's plans on health service reform come to fruition.....we'll be playing "guess the Guy" daily.

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  • Well, they're in good company. Along with all the PCT, SHA and DoH staff being made redundant. Double standards? They're doing nothing different to the rest of the NHS.

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  • Spike Humphrey

    Interesting that so many people leaping to Circle's defence are "Anonymous".

    First, Circle announced in November 2011 that they did not expect job losses, then their actual job loss plans were concealed in the published business case. These 2 facts cannot be argued away.

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  • Bit of a none story which plays into Ali Parsa's hands by targetting Circle, because the majority of trusts I'm aware of have similar plans for the next 3-5 years: how else can the N NHS make £20bn in savings?

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  • Spike, all organisations spin stories to their own ends, after all your own Save Heatherwood Hospital campaign website implies there's a threat to close that hospital when the actual plans are to develop a new elective treatment centre on-site.

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  • Surely the point is that Circle say they are something special and rather different to everyone else.

    I agree everyone is under pressure however Circle seemed to be claiming they had some special potion

    Seems Circle are not so special after all - apart from being owned by a Hedge Fund.

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  • No-one seems to comment that Circle's structure looks very similar to the deficit ridden Trust it is trying to turnaround.

    The operating company - Circle Health - has been financed through equity and loans from the finance company - Circle Holdings which is AIM listed.

    As at 31 December 2010, £115.9 million of the finance raised by Circle Holdings had been passed down to Circle. And no doubt since 31 December 2010 many more loans created.

    Thus the shareholders of Circle (doctors, nurses, cleaners etc) will have to hope that the company does well enough to pay back the hedge fund paymasters before they have any hope of seeing any value.

    I guess compared to their own "accumulated deficit", Hinchingbrooke's looks like small change.

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  • I agree with Roger Kline, Circle say they are a break with the old ways. The reality is the issues the face are the same, and their responses (staff cuts) the same. Most NHS CEO's are courageous enough to say it, but not it seems Mr Parsa. Even his comment, that the reasons are for TUPE transfers as services move to the community, is contradicted in his own document, that the cuts would be in accounting and clinical support fuctions.

    You may be good at convincing the City Mr Parsa, but we can see through your words.

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  • I think what people have a problem with is Parsi's public statements which suggest that he can make unprecedented level of savings without it having any impact on the quality of service delivery.

    Not long agos he was stating that they had no plans for cutting staff, implying that he could somehow find making £20m+ of savings a year through the old chestnut of "cutting waste and inefficiency".

    Most of us that have worked in the service and are aware of the proportion of the budget that is spent on staff salaries are a bit skeptical of this. We don't believe he's got some magic plan to remove costs, we pretty much know that he'll have to do it the same way as everyone else and that it will be painful.

    When he says (to paraphrase) "we've concentrated up to now on turning around the clinical performance and now we need to focus on the financials" we know he's ignoring the fairly obvious fact that maintaining that clinical performance might be quite difficult if you cut 20% (or even 15% or 10%) of the staff.

    And let's not go through the tired old "we'll make the cuts in back office and support services" nonsense. Whilst there might be a few hundred thousand readers of the Daily Mail that believe all our hospitals are crammed with hundreds of managers and administrators doing no useful work, those of us that have actually worked in them know that isn't true.

    Most administrators are doing stuff that someone else would have to do otherwise. If you want to axe all your ward clerks it will improve your clinical staff to non-clinical staff ratio, but you're just going to be paying more expensive nursing staff to do the things they were doing.

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