Hospital trusts go broke as NHS is bled dry

The threat of a crisis in the National Health Service this winter deepened last night with the disclosure that 36 trust hospitals have gone into the red by pounds 34m, despite a statutory responsibility to break even.

Stephen Dorrell, Secretary of State for Health, will tomorrow bid for an extra pounds 1.5bn for his pounds 33bn NHS budget at a special Cabinet meeting on public expenditure. Against that background, figures given by the Department of Health to the cross-party Commons Select Committee on Health for 1994- 95 - the latest available - show that operations could be cancelled and patients made to wait longer this winter as hospitals struggle to make ends meet.

Trusts in the red at the end of 1994-95 included the Royal National Orthopaedic (pounds 3.4m), Royal United Hospital, Bath (pounds 2.5m), Greenwich, south London (pounds 2.8m), Swindon and Marlborough (pounds 500,000) and the Royal National Throat Nose and Ear Hospital (pounds 826,000). Other trusts had technical deficits, including the Horizon trust in North Thames (pounds 8.3m), East Cheshire (pounds 1.5m) and East Somerset (pounds 1.2m).

The Government has slipped into the Commons library figures showing that 63 of the 99 district health authorities expected deficits in the 1996- 97 financial year. The authorities were expected to be nearly pounds 118m over budget, but they are not under the same pressure as individual trusts to break even, and many will make cuts to wipe out their deficits.

"We now know from this information that not just health authorities but also some hospitals themselves are heading for serious deficits," Chris Smith, shadow health secretary, said. "For patients, that means whole wards closed, staff shortages, operations cancelled and longer waiting lists. The Government must shoulder the blame."

The figures, pinpointed by the Labour MP Hugh Bayley, a member of the select committee and a health economics expert, also show that the total number of available beds has been slashed by nearly 2 per cent between 1990 and 1994, including cuts of 7.5 per cent in Bradford, 6.9 per cent in Shropshire, 8 per cent in Bromley, south London, and 11 per cent in Barking, east London. Ministers insist it is because hospitals are becoming more efficient.

The hospitals which have gone into the red have been told by the Department of Health to wipe out their deficits by stopping some work or demanding payment from health authorities. "They are expected to break even year on year," a spokesman said. "They will have to make savings or reductions."

A ministerial source said many trusts were victims of their own success because they were dealing with more patients than their health authorities had budgeted for. "They have to taper-off their elective surgery at the end of the year because of the winter rise in emergency treatment," the source said. "There are very few elective admissions [patients treated from the ordinary waiting list] in December and January, and the risk of over-stretch at the end of the year is quite high."

Mr Dorrell will be bolstered at tomorrow's Cabinet meeting by a Tory manifesto commitment, recently renewed by John Major, to spend more in real terms on the NHS every year.

Ministers deny that there is a crisis but admit that some trusts have a "structural problem". In some areas this was caused by the closure of military hospitals, which performed operations for NHS patients on the defence budget. In an earlier crisis, patients were shuttled around the country because London hospitals were full. To avoid that happening again, an early warning system has been set up to alert specialists of bed availability across the country.

Tomorrow's Cabinet meeting will seek to cut around pounds 4bn from the pounds 268.2bn public spending bill to make way for tax cuts in the 26 November Budget.

Michael Heseltine, Deputy Prime Minister, backs more spending on health, education and police but other budgets, including roads, housing and heritage, are set for big cuts.

Blair's prescription, page 15