FINANCE: Southern Health, the community and mental health services provider in Hampshire, is planning to save £23.7m – or 7.5 per cent of its turnover – in 2011-12 through its cost improvement plan.
According to a forward plan strategy document prepared for Monitor in May, the trust is planning further savings of £15.1m in 2012-13 and £11.5m in 2013-14.
The document, seen by HSJ, says that the trust is planning three major efficiency schemes which will be subject to public consultation: redesigns of the older people’s mental health and adult mental health rehabilitation pathways, and acute inpatient services rationalisation.
In community services, the trust is also planning to redesign inpatient facilities at two community hospitals, and savings on IT and property, managed alongside NHS Hampshire, who still own most of the community services estate.
A higher CIP target of 10 per cent – or £3m - is being applied to corporate and back office services, “representing cost benefits and economies of scale” associated with the trust taking on Hampshire’s community services.
The costs are expected to total £2.5m in 2011-12, of which £2m is expected to be redundancy costs “associated with corporate services”. A further £500,000 of transition costs are expected in 2012-13 and another £100,000 the following year.
All the costs of restructuring, such as redundancies, transaction costs, pay protection, organisational development, estate rationalisation and IT costs will be borne by Southern Health, with no extra funding from Hampshire PCT.
The trust’s contract with NHS Hampshire for community services has been cut by £800,000, with an extra £1.4m cut to be recovered by closing two community hospitals by January 2012. A further £300,000 has been cut, with the opportunity of making that up by moving elective work from the Royal Bournemouth and Christchurch NHS Foundation Trust to Southern Health’s Lymington New Forest Hospital.
Mental health and learning disability contracts with Hampshire and Southampton PCTs include reductions worth £5.2m to deliver quality innovation, productivity and prevention savings and “non-recurrent solutions agreed in 2010-11”.
The report notes that Hampshire Partnership NHS Foundation Trust, which acquired the community services arm of Hampshire primary care trust this year to form Southern Health, has met or beaten its financial targets since winning FT status in 2009.
Southern Health plans to increase its annual surplus from £4m (1.2 per cent) in 2011-12 to £5.7m (1.9 per cent) by 2013-14. The trust is also planning to sell three properties in 2011-12 for £1.5m.