NHS South West Essex has set out plans to make 224 staff redundant in order to save £5.7m over the next financial year.

The planned reduction in staff, which would return them to 2008 levels, is part of a “turnaround plan” published by the primary care trust on Monday. It is currently forecasting a £21m year end deficit and needs to save at least £52m to end in balance.

The PCT said its costs had increased from £503m in 2007-08 to £723m in 2010-11, during which the number of full time equivalent staff had risen from 271 to 357 in the commissioning arm and from 973 to 1,446 in the provider arm.

As a result, it intends to introduce a redundancy programme in order to shed around 99 staff from its commissioning arm – achieving a saving of £3.2m – and around 125 staff from its community services provider, reducing its annual contract by £2.5m.

Staff will be offered the opportunity to apply for voluntary redundancy, and the PCT said it was already considering 25 applications from its commissioning arm.

However, it noted the government’s “mutually agreed resignation scheme” – the national voluntary severance package agreed with unions at the start of September – was “not suited” to the PCT’s redundancy process.  

A 90 day consultation on the redundancy savings plan began on Monday and will close on 8 January 2011. The PCT said “other options on how the savings can be delivered are welcomed” in the consultation document.

In a letter to staff chief executive Andrew Pike said: “We would like to consult about the proposed selection criteria, ways of avoiding redundancies, reducing the numbers to be dismissed and mitigating the consequences of any dismissals that subsequently take place.”

Two weeks ago NHS South West Essex announced it was forming a cluster with NHS South East Essex under the leadership of Mr Pike as single chief executive.

The union Unison claimed more than 600 staff could end up losing their jobs over the next 12 months, as a result of the clustering arrangements by the two PCTs.  

Unison regional officer Nick Bradley said: “These redundancies are a tragedy for hundreds of health service staff and patients, at a time when there are already growing numbers of people unemployed in the local economy.  

“Staff will find it increasingly difficult to find alternative employment. Whilst the PCT is talking to the trade unions and offering voluntary redundancy, we believe these cuts cannot be carried through without devastating local health services.”

But HR project director Luella Dixon, who is supporting the redundancy process at NHS South West Essex, said: “In the current economic environment we can no longer afford the level of staffing that we currently have and so difficult decisions are having to be made.

“We aim to be open and fair and keep our staff informed throughout this process. These changes will not impact on patient care. Staff who could potentially be at risk, and involved in the consultation, are in non-clinical roles.”