The must read stories and debate from Friday

‘Financial castles built on sand’

Following Thursday’s brutal financial reset by NHS Improvement and NHS England a number of chief executives and trust directors have hit back at claims they may have over-recruited staff and have “excess growth” on their pay bill.

There was widespread concern and shock among some senior leaders HSJ spoke to after the list of 63 trusts who were deemed to have over-spent on staffing was revealed.

Some claimed NHS Improvement’s methodology was likely to be “totally flawed” and did not take into account issues like service transfers, historical understaffing, demand increases etc.

In its document, NHS Improvement said it had based the list on trusts which had seen an increase in their paybill since 2014 that was higher than inflation. The additional amount above inflation was then halved and is expected to be added to the trust’s control totals.

One finance director told us these control totals were “financial castles built on sand”.

Karen James, chief executive of Tameside Hospital Foundation Trust, said: “I don’t see that this can be an accurate reflection of the situation because we are trying to recruit. I can imagine the methodology is totally flawed, we are not over-staffed whatsoever.”

Mid Cheshire Hospitals FT’s CEO, Tracy Bullock, said: “Over the two year period in question [2014-16] the trust has seen a 16 per cent increase in activity and has had to respond to that to meet the needs of patients.”

Crunch time

“Now we come to the crunch,” writes the HSJ editor in response to Thursday’s series of major policy announcements and financial intervention. “The myriad policy announcements contained within the so called ‘financial reset’ are the most significant development in health service policy since 2015’s comprehensive spending review.”

He says: “The pent-up need for action has been packaged and released in one hit, which is very much in tune with the ‘just get on with it’ school of policy making favoured by the new PM and chancellor…

“In a world which appears more divisive every day it would be easy to see the reset as the kind of centre versus local dispute which the health service is so familiar with.

“The truth is more complex and, as a result, more difficult to resolve. The answer can only lie in dialogue, compromise and an honesty about what can and should be achieved.”

Trust unviable in current form

East Cheshire Trust has confirmed to HSJ that its board no longer believes the organisation is sustainable in its current form.

Discussions about its future have included considering the feasibility of it becoming an accountable care organisation for the region. The trust has said despite its difficulties there has been no talks about the trust being merged or taken over.

Trust chief executive John Wilbraham also said in a board report: “I recognise that there will be significant challenges in delivering locally based services in the coming years. The trust board has confirmed that in its current form the organisation is not sustainable.”