North by North West: Accountants take back control

The taps that poured huge amounts of cash through the NHS during the covid pandemic have turned to a drip, with ministers demanding strict financial discipline.

Where clinicians called the shots over the last two years, the accountants have now taken back control.

This is evident from the sudden leadership change at Countess of Chester Hospital Foundation Trust, where there has been a breakdown in relations between a clinician CEO, and her accountant chair.

The small acute trust has been struggling on multiple fronts over the last year, with the Care Quality Commission rating it “inadequate” for leadership. But Susan Gilby, the trust CEO, still appeared to have the support of regulators and her board when that judgement was given in the summer.

Since then, however, CoCH has reported a £14m deficit for the seven months to November, £10m worse than planned.

Multiple sources external to the trust, but with knowledge of the situation, said the relationship between Dr Gilby and the relatively new trust chair, Ian Haythornthwaite, a former director of finance for the BBC, has deteriorated to an unrecoverable extent.

This resulted in Dr Gilby tendering her resignation earlier this month, giving six months’ notice. But Mr Haythornthwaite then told staff last week an acting CEO would take over the trust today, in the shape of Jane Tomkinson, Liverpool Heart and Chest Hospital FT chief executive, who will do both roles jointly.

Tellingly, Ms Tomkinson is also an accountant, having previously held multiple finance director posts, including at CoCH and NHS England’s regional directorate.

Chair leaves after one term

There has also been leadership change at another troubled provider, Liverpool University Hospitals FT, with Sue Musson leaving the trust after only one three-year term as chair.

It comes after a tumultuous 18 months, in which the trust was also rated “inadequate” for leadership and effectively placed in special measures.

But multiple sources told me Ms Musson wanted to stay on for a second term, and that she was supported by governors.

Whether it was NHSE or health and social secretary Steve Barclay who stepped in to block her reappointment is unclear. But it’s likely they had seen a recent report by accountancy firm PwC, commissioned by the Cheshire and Mersey Integrated Care System, which flagged various issues around financial governance at the trust.

The confidential report, seen by NxNW, said the trust’s underlying financial deficit had deteriorated by £73m since it was formed three years ago, which was largely due to a “substantial increase in the trust’s recurrent cost base during the pandemic, with no clear plan on existing costs which were funded through non-recurrent income”.

The report, commissioned by Cheshire and Mersey adds: “The most significant factor in the growth in the cost base is a £112m growth in pay costs driven primarily by a growth in whole time equivalents of 960. There has been growth across all staff groups.

“The growth in staff numbers is not proportionate to changes in activity volumes or bed occupancy over the same period, and only a small amount of the cost growth is evidenced in business cases. This suggests that while the trust was responding to the covid crisis, establishment and other approval controls did not operate effectively.”

I’m sure many at the trust would say the hiring spree was an appropriate response to a pretty shocking CQC report, but the world has now changed.

When it comes to appointing Ms Musson’s replacement in the new year, what’s the betting it will be an accountant?