FINANCE: The trust will have to find savings of £22.5m in 2011/12 to make up for nationally directed price cuts of 1.5 per cent, latest board papers show.

The NHS operating framework for 2011/12 imposes the requirement for 4 per cent efficiency savings across NHS providers. After factoring in a 2.5 per cent increase for pay and price inflation, this translates to a 1.5 per cent reduction in the payment by results tariff.

A report to the Pennine acute board said this reduction is “the equivalent of a need to make £22.5m worth of efficiencies to address inflationary pressures of £14m and loss of income of £8.5m”.

It added: “The Trust is undertaking a detailed testing programme to assess the effect of the change in the tariff and therefore income. This will supplement the budget setting processes for expenditure, consideration of other financial pressures and the cost reductions necessary to disinvest in services to deliver Commissioners’ levels of activity in 2011/12.”