NHS managers should not be blamed for the financial ills caused by government short-termism, MPs heard last week.
Mike Ridley, who has just retired as chief executive of North Stoke primary care trust, was responding to criticism of NHS managers' approach to financial planning during the Commons health select committee's inquiry into NHS deficits.
He told the MPs: 'I can confidently predict that the NHS won't get a grip on its finances while there are short-term changes to financial planning.
'There have been two or three things this year which have had a serious impact on our finances, such as contributions to the NHS Bank and a shortfall from the purchasing parity adjustment, which are outside our control, and these have affected our financial planning.'
The purchasing parity adjustment was introduced to compensate PCTs that have previously paid below tariff prices for hospital treatment. But payments have been halved for the next financial year, leaving many PCTs with a shortfall.
Mr Ridley was responding to criticism from committee member Labour MP Dr Howard Stoate that NHS managers should have 'got a grip' on finances before it reached a critical stage. 'If it was a business, you would be looking at your finances long before it became really serious and saying, we'd better do something,' said Dr Stoate.
Worcestershire Acute Hospitals trust chief executive John Rostill said that his organisation was getting 'more of a grip' on its finances.
'It is a very difficult process and we are getting better at it,' he said.
Mr Rostill said that as a result of the deficit at the trust, the number of nurses had been cut by 25 per cent and clinical posts by around 10 per cent. The number of clinical directors had also been cut, from 17 to 10, he said. It was also outsourcing some back-office, accounting and administration functions.
'We can't reduce NHS deficits in one year and there needs to be much more long-term planning to reduce them,' said Mr Rostill.
Mr Ridley said North Stoke-on-Trent PCT, now merged into Stoke on Trent PCT, had a£18m deficit and was trying to get back into balance in the next year: 'We are now on the right road, but I think the deficit may be the straw that breaks the camel's back. We have to save£16m in the next year and that is desperately, desperately hard.'