The trust predicting the largest deficit in the country is considering a “wholesale approach to outsourcing corporate functions”, HSJ has discovered.
South London Healthcare Trust’s board is considering options for the outsourcing of “middle and front office functions” in what is likely to be one of the largest such plans in the acute sector to date.
The trust is predicting a £65m deficit this year and deficits of more than £30m for each of the next five financial years.
Chief executive Chris Streather told HSJ there could be outsourcing of “transactional” corporate functions, HR, estates and finance, plus “admin and clerical outsourcing”, with some work done abroad.
The £438m-turnover trust faces a significant savings challenge to achieve financial balance. Dr Streather said: “we need to show [ourselves] willing to adopt innovative ideas.”
Although facilities management staff at acute trusts are sometimes employed by private firms as part of private finance initiative deals, the “wholesale” outsourcing of administrative work considered by the trust is uncommon in the sector, in comparison with local government.
The trust has delivered £70m in savings since it was formed in April 2009 but a strategy document said there could still be a significant shortfall on its savings plans, even if the trust delivered planned annual cost reductions of more than 5 per cent for the next three years.
Dr Streather said: “There is a gap that we think is closable but we will have to do something a bit more than cost improvement programmes and estate rationalisation. To get there we have to be open to the idea that we might have to do other stuff.”
He told HSJ the organisation was “exploring the possibility” of being more “adventurous” in introducing change that would make more than the £5m-£7m savings usually available from outsourcing in a trust of South London’s size.
Dr Streather stressed there were “no secret plans” to outsource clinical directorates.
Any outsourcing would only take place once the organisation had become “leaner”, he said.
The trust said a planned headcount reduction of 695 posts would save £30m each year.