Published: 05/08/2004, Volume II4, No. 5917 Page 7

Two trusts which had their hopes of foundation status dashed have unveiled tough plans to cut 500 jobs and save£28m.

Southampton University Hospitals trust and Winchester and Eastleigh Healthcare trust both applied to be in the autumn wave of foundation trusts.

Winchester and Eastleigh withdrew its application on 1 July, weeks before it lost two stars.

Southampton became ineligible later last month, when it lost a star.

Southampton lost a star due to its financial problems while Winchester and Eastleigh failed on booked admission problems and accident and emergency waiting times.

Andrew Liles, acting chief executive of Southampton until last Friday, said the problems would mean 'some delay' in gaining foundation status, 'but we are still keen to pursue it because it will bring real benefits'. He was replaced by former Royal Wolverhampton Hospitals trust chief executive Mark Hackett on Monday.

Southampton says now that measures introduced in May to cut a£15m deficit are not working fast enough. Just three months into the financial year the trust was£5.2m in the red and plans to cut staff had made little impact on the payroll.

Now the trust says it needs to cut at least 380 administrative, clerical, headquarters and outpatients jobs to reduce costs by£10m and to reduce non-staff costs by£5m.

Two wards will be closed in order to reduce agency staff costs.

In a statement, the trust said:

'We are not planning large-scale redundancies although redundancy will be an 'option of last resort' for some individuals.

'We originally hoped staff numbers would fall as a result of modernisation projects and natural wastage. Our policy in recent months was to fill only half of all vacancies until staffing numbers had fallen by 485 posts.

'It is now clear that many of the projects will take longer to implement than first thought, so we need to speed up other parts of the savings plan if we are to reach where we want to be.'

Winchester and Eastleigh Healthcare trust says it must lose at least 100 posts as part of a recovery plan to save£13m.

Chief executive Rod Halls said there was 'a certain amount of unhappiness' at the board last week when the cuts were agreed.

The trust has also ordered a freeze on all non-statutory external courses and conferences; a requirement that all stock requisitions are authorised by a general manager or executive director; and a freeze on all nonessential expenditure such as computers or furniture.

It is also examining expenditure across the entire trust.

'We have done these things now to make sure that we do not have to do anything more unpalatable in the future, ' explained Mr Halls.

'We are not going for any compulsory redundancies as we have a large turnover of staff.'

Mr Halls said the problems for both trusts had the same root.

'There is a view that the amount of money coming into the local system does not reflect the amount of demand.'

The independent regulator has confirmed that the next 20 foundation trust applicants will be handled in two groups. It aims for nine trusts to be assessed by November, while 11 trusts - largely teaching and specialist trusts - will be assessed by February.