FINANCE Shadow health secretary blames £1bn def icit on 'ballooning' management costs

Published: 17/11/2005 Volume 115 No. 5982 Page 5

Managers have rounded on the Conservative Party for blaming a£1bn black hole in NHS finances on an 'army of administrators'.

Shadow health secretary Andrew Lansley said it was 'no coincidence' that total spend on managers and clerical and support staff amounted to£1.3bn, while the NHS deficit was reaching£1bn.

Figures collected from strategic health authorities showed a total deficit, including underlying deficits, of£997m. The figure does not take account of any surpluses.

Worst off is Avon, Gloucestershire and Wiltshire SHA, predicting a year-end shortfall of£115.8m. Surrey and Sussex predicts£104.6m, while Bedfordshire and Hertfordshire reckons on£100m and North West London expects to be£99.4m in the red.

Mr Lansley used the figures to launch the attack on the amount of money the NHS spends on administrators. He told HSJ before an Opposition debate on Tuesday that 'ballooning administration' could not be defended, and that management should be about 'quality not quantity'.

But he said the government could not lay the blame on primary care trusts, given that the implementation costs of central policies were 'eating up' over 80 per cent of funding.

Mr Lansley said the Conservatives' survey of trusts found 43 making cuts this year, amounting to 2,500 fewer beds. The party has also tabled an early-day motion deploring a 'programme of closures' among community hospitals after a survey of their MPs suggested 30 hospitals were at risk.

NHS Confederation chief executive Dr Gill Morgan pointed out that only 2.8 per cent of NHS staff were managers - a 'vital part of the NHS team'.

She said investment in pay reform and IT were key factors in the rising deficit.

Institute of Healthcare Management president Gerry McSorley accused the Tories of 'politicking'.

Opening the IHM annual conference on Tuesday, he said: 'Managers know that they're always cheap targets for these sorts of allegations instead of taking a deeper and more rigorous investigation into how the money is committed.' At the same conference, NHS chief executive Sir Nigel Crisp defended the 4 per cent management spend. He said a service which spends£2,000 per second, employs 1.3 million people and treats 1 million patients every 24 hours 'needs really good managers - especially [when it is] engaged in the biggest organisational transformation in the world'.

Health secretary Patricia Hewitt told the Commons on Tuesday that poor financial management, several years of overspending and poor organisation of clinical services had caused deficits 'at a minority of trusts'. She said steps were being taken to bring the NHS into financial balance and stop organisations 'bailing' each other out.

The opposition debate came as HSJ learned that payment by results has been suspended across parts of Hampshire because of the state of finances at some acute and primary care trusts (see story, page 6).

Forecast deficits of organisations across SHA areas

Avon, Gloucestershire and Wiltshire£116m Surrey and Sussex£105m Bedfordshire and Hertfordshire£100m North West London£99m Norfolk, Suffolk and Cambridgeshire£92m Cheshire and Merseyside£74m Greater Manchester£6.4m (including£57m 'support') Hampshire and Isle of Wight£59m North and East Yorkshire and Northern Lincolnshire - no forecast: expects support of£42m Essex£40m Shropshire and Staffordshire£40m West Midlands South£33m South West London£30m Thames Valley£26m South East London£13m Birmingham and the Black Country£11m Leicestershire, Northamptonshire and Rutland£10m Cumbria and Lancashire£8m North Central London£7m North East London balance - current risks of£11m South Yorkshire balance Northumberland, Tyne and Wear balance

Figures, which have been subject to rounding, come from SHA September and October board papers.