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Financially stricken trust to cut pay bill by 10% in six months

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A South London teaching hospital plans to cut its pay bill by 10% over the next six months despite already having a significant number of vacancies.

St George’s University Hospitals NHS Foundation Trust has said it needs to reduce spending on staff by March, but it will continue recruiting junior doctors and clinical staff at band five and lower.

“We will ensure staff can continue to deliver services safely and effectively”

Trust statement

The changes are likely to be made by keeping posts vacant when staff leave. Essential clinical posts will continue to be recruited to.

Earlier this week, it was revealed that the trust was also working on proposals to deny free maternity care to “non-eligible” women from overseas, by requiring all patients to prove they are entitled to use the NHS. The trust said the cost of non-eligible overseas patients to the local health economy was £4.6m a year.

Last month, St George’s was identified by NHS Improvement as being at risk of being placed in “financial special measures” because it was more than £2m behind its financial plan after the first three months of 2016-17.

A trust board paper stated that the organisation believed the action would save £7.6m and was described as a 10% “headcount reduction”. However, the trust has told Nursing Times’ sister title Health Service Journal that the paper was wrong and the cut would be made to the overall paybill not staff numbers.

The trust’s annual report said it had a payroll cost in 2015-16 of more than £434m, and in recent months there has been a £15m increase due to inflation pay uplifts and a £4m increase due to recruiting more nurses to meet safe staffing levels.

The trust had a total vacancy rate of 16.5% in August with one in five nursing and midwifery posts vacant. It had an 8% medical vacancy rate and 16% vacancy rate for administrative and clerical staff.

In its latest workforce report, the trust identified key risks around staffing such as “failure to recruit and retain sufficient staff in relation to annual turnover rates and to safely support future increases in capacity”.

St George’s Hospital

St George’s Hospital

St George’s Hospital in London

It also warned of “possible reductions in the overall number of junior doctors available with a possible impact on particular speciality areas”.

However, the trust did say its vacancy rate has decreased by 0.6% and turnover has reduced by 0.3% since July – the first decreases in both measures since March. The trust employs 8,620 full-time equivalent staff.

In a statement, the trust said: “As part of our financial recovery plan, we are reducing pay costs by approximately 10% between now and the end of March 2017.

“We plan to achieve this by not recruiting to certain posts as and when they become vacant. However, we will ensure staff can continue to deliver services safely and effectively.

“We are protecting clinical services by continuing to recruit to all clinical band five posts and below, plus all junior doctor posts.

“Our medical director and chief nurse are reviewing all posts which we plan to leave vacant. Any posts judged essential to delivering services safely will continue to be recruited to.”

It is understood that trust staff were briefed about the plans last month.

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