Interventions taken by regulators in the coming weeks to regain control of NHS finances could result in some providers having fewer clinical staff, Nursing Times’ sister title HSJ has been told.
Efforts to reduce the provider deficit are set to focus on 30 - 40 trusts where the pay bill either increased substantially last year, or which have planned for growth in 2016-17.
In an exclusive interview, Jim Mackey, chief executive of new regulator NHS Improvement, said trusts exceeding the ratio of one nurse to every eight patients could be told “we can’t afford that”.
Mr Mackey said some of that pay bill growth might have been justified, but his team are in the process of exploring where growth that took place last year can be “corrected”, and planned growth for 2016-17 can be ”mitigated”.
”A lot of providers ended up using bank and agency [staff] to try and get close to the safe staffing recommendations, but some went beyond that 1:8 ratio”
He said “it is possible” this will lead to fewer clinical staff on wards, adding: “I can think of a couple of providers that went beyond the safe staffing requirement.
“A lot of providers ended up using bank and agency [staff] to try and get close to the safe staffing recommendations, but I’ve met with some that went even beyond that 1:8 ratio from a nursing point of view.”
Mr Mackey said NHS Improvement would scrutinise pay costs across the entire provider sector, not just acute trusts.
The NHS provider sector reported a deficit of £2.45bn in 2015-16, leaving the Department of Health with a huge financial hole to fill in its year-end accounts, which are due to be published this month.
The sector has planned for a deficit of £550m this year, but regulators expect this to reduce to £250m.
Mr Mackey said it was too early to say how much of the pay growth was unjustified, adding: “We’ll have a better feel at the end of this process. By the end of July we want to be really clear what that means for each provider’s plan, so how much of it can be corrected and what’s the timescale.”
A key principle for NHS Improvement was to bring “more fairness and equity” between providers, Mr Mackey said. “If you’re an organisation that has exercised real restraint, and next door an organisation is performing the same or better and has exercised less restraint, that’s potentially quite toxic”.
”[I’d be] surprised if there was a provider that actually has to have a huge lay off process”
The process, he said, is about “just restoring good discipline, good governance, and good processes that have continued to exist in our best providers”.
He said substantive staff as well as agency workers accounted for the pay growth, but he would be “surprised if there was a provider that actually has to have a huge lay off process”. He suggested numbers could be reduced by voluntary redundancies or leaving roles vacant.
There was expected to be an announcement later this week, dubbed a financial “reset”, which will outline the consequences for providers that fail to improve their financial situation.
Source: Neil O’Connor
HSJ understands the consequences would involve an assessment of board capability and potential changes to senior personnel, with consideration given as to whether the organisation should be merged or taken over by another trust.
Mr Mackey denied that pay cost growth was a legitimate reaction to rising demand. “When everyone says activity went up 2 per cent, therefore cost needs to go up, no it bloody doesn’t.”
He added that some providers were “on the edge of going out of business” and were close to not having enough cash to pay staff.