There has been a big jump in the number of NHS organisations planning to cut staff, an HSJ survey has revealed.

The magazine’s quarterly survey of NHS finance directors shows the proportion planning staff cuts has increased from 11 per cent in June to 53 per cent at the start of October.

Crunching their numbers

73% - are reviewing skill mix and pay banding

18% - have recruitment freezes now

20% - of the remainder will introduce them by the end of the year

72% - of acutes plan to cut head count

Headcount reductions are most common at acute trusts, where 72 per cent of finance directors say they are planning reductions.

The survey - which involves detailed telephone conversations with a panel of 45 finance directors from across the NHS - shows the most vulnerable staff groups are junior managers and administrators.

At the time of the first quarterly survey in June, 34 per cent of participants said they expected a “moderate” reduction in junior managers at their organisations and 37 per cent said they expected cuts in administrators. That has now increased to 45 per cent and 50 per cent of all respondents.

The single most vulnerable group of staff are administrators working in acute hospitals, where 72 per cent expect to make “moderate” reductions in administrative staffing.

The survey was conducted in the first nine days of October and so coincided with shadow health secretary Andrew Lansley’s pledge to cut NHS administration | costs, chiefly at quangos, primary care trusts and strategic health authorities.

The increase in vulnerability for managers and administrators over the last three months has been balanced by a decrease in vulnerability for clinicians. In June over a quarter of participants said they expected to make cuts in their clinical workforce; that has reduced to fewer than one in 10.

But for all staff categories the biggest single response was for the numbers to remain unchanged - indicating providers would attempt to treat more patients but with the same number of staff.

The proportion of participants saying they had a recruitment freeze at present has increased threefold since June from just 6 per cent to 18 per cent. This is most significant in PCTs, of which just under a third say they now have a recruitment freeze in one or more parts of their organisation.

Of those without recruitment freezes at present, a fifth said they planned to introduce them later this financial year. Those plans are most focused on administrators at acute hospitals.

The survey also asked participants to compare their current financial outlook with their outlook last year.

PCTs were the least optimistic, with a third describing their financial outlook for this year as “substantially” worse than last year - a marked deterioration since June when just 6 per cent said this year was “substantially” worse than last.

By contrast just over a fifth of acute hospitals described their outlook as “moderately worse” than last year - an improvement since June when 46 per cent described their outlook as worse.But that optimism came before HSJ revealed the DH is considering capping the volume of patients for which commissioners will be required to pay the full tariff under next year’s payment by results regime.

Foundation Trust Network director Sue Slipman said it was in “everyone’s interest” that the system as a whole was kept in financial balance but it would be unfair to continue to block foundation trust involvement in demand management - for example by refusing to allow them to run community services.

“You cannot deny people the ability to manage demand and then penalise them if that fails to happen,” she said.

Professor of health economics at York University Alan Maynard agreed, saying the last time a “two-part” tariff was used “allowing the hospital to get 50 per cent was really quite a good imbursement so the incentive to get things into the community was muted”.

He said he would urge the DH to reduce the payment further, but it would be hard to apply that to elective procedures as well as emergency care because it would conflict with waiting list targets.

Who was surveyed

The HSJ quarterly finance survey has been running since June this year. We have recruited an anonymous panel of 45 finance directors from a representative cross-section of NHS organisations. The panel members are interviewed on the phone by market research specialists Explomarket and except for minor changes and fine tuning, the questions in each survey are the same, allowing us to track changes and trends over time. The next survey will take place in January.