Finance experts to rescue struggling hospitals

Teams of financial and management specialists are to be sent into NHS hospital trusts which are deeply in the red to turn around their deficits.

Giving evidence to the Health Select Committee on public expenditure, the NHS chief executive, Sir Nigel Crisp, announced that the "turnaround teams" will be sent to work with strategic health authorities (SHAs), hospital trusts and primary care trusts (PCTs) facing the greatest challenges for this year.

Sir Nigel also revealed that the latest financial forecasts for the end of the year for all NHS organisations showed a net deficit of £620m. Andrew Lansley, the shadow Health Secretary, said the figure was likely to be nearer £1bn. He said: "NHS finances are spiralling out of control - the net deficit has more than doubled since last year."

Sir Nigel insisted that "improving financial management" would not mean compromising services for patients."We recognise that it will be tough for all organisations to get back into financial balance this year. Therefore, we have agreed a plan with SHAs that there will be a deficit of £200m to be repaid next year.

"Make no mistake, this is not a financial bail-out of trusts in difficulty - those organisations in deficit will have to repay any debt."

Mike Penning, a Tory member of the select committee, said: "Sir Nigel is blaming the management of hospitals and trusts. I don't think that is fair. The real blame lies with the Government and the formula they have imposed, which has produced lower spending per capita in the South-east than the North."

Mr Penning said his own strategic health authority for Bedfordshire and Hertfordshire was £90m in deficit and some hospitals were closing wards. "It's out of control," he said.

There are growing fears that cuts in hospital spending will hit patient care, and heighten the threat of a winter crisis in the health service. The British Medical Association warned against "bully-boy tactics" among the teams working with struggling organisations.

"The BMA has been trying to tell the Government about the NHS debt crisis for some time now," a spokeswoman said.

"It is clear that despite increased NHS funding there is still a shortfall of resources to meet patient expectations. There is also a need for enhanced financial management. NHS trusts are facing the biggest and most radical reform in health policy since the inception of the NHS. What they need is support, not being thrown into the deep end, left to sink or swim."

The Liberal Democrats said the Government's reforms were creating "massive instability" in the NHS.

The party's health spokesman, Steve Webb, said: "This is the latest evidence of the financial crisis afflicting the NHS." He said many hospitals were being forced to make "drastic and swingeing cuts".

"The rollercoaster of NHS trust finances makes it impossible for hospital bosses to plan effectively," added Mr Webb.

The NHS director of finance, Richard Douglas, told the committee there was always a "degree of pessimism" within trusts and they would not want to advertise surpluses for fear of losing them.

He admitted that the overspend on GP contracts was about £300m, while consultant contracts had gone £90m over budget.

There was no final figure available for a predicted overspend on Agenda for Change, which deals with pay arrangements for other NHS staff, but it would not be as much as the £900m reported, he said.