“We have to return to a stable financial position” says health CFO

The NHS in Shropshire is facing making ‘difficult decisions’ as leaders set out a three year plan to cut up to £260 million from projected overspending to reach ‘break even’ and ‘non clinical’ back office functions, replacing agency with bank staff, reducing vacancies, sickness, turnover and unavailability are in the sights.

Health leaders at NHS Shropshire, Telford & Wrekin were told at a meeting that they will need to make “significant efficiency and productivity improvements.”

A report to yesterday’s board meeting (Wednesday, June 25) set out plans to reach a break-even position within three years.

They are planning to make total ‘efficiencies’ of £95.5 million this year, £80.6 million in 2026/27 and £84.5 million in 2027/28.

“We have to return to a stable financial position,” said  Claire Skidmore, the Chief Finance Officer & Deputy Accountable Officer. “This is an ambitious plan and not without risks.”

Health leaders from across hospital and community services will be told that cost management is “critical”. But Ms Skidmore said she believed that “we can do that.”

Dave Bennett, interim Chair of the Finance Committee, told the board that he was “quite positive” after telling colleagues that they had recorded a £1.8 million deficit up to the end of the second month of this financial year. But this was a better position than last year and large “efficiencies” have been made.

He added though that “escalating bank costs” for employees was an issue that they will be measured on.

“We need to get back on to managing that,” Mr Bennett said.

Roger Dunshea, chairing his last meeting, told the board that it is a “good start to the financial year.”

Andrew Morgan, who chairs both Shrewsbury & Telford Hospitals NHS Trust and Shropshire Community Health NHS Trust, said “some parts” of the health system “do not have a glorious track record”.

“Why would NHS England believe this financial plan?”

Ms Skidmore said it is about “developing credibility” by “doing what we said we will do.”

She added that it is “clear we are not going to break even in one year”.

The board is also hoping to leave a high level of financial oversight from the national NHS.

Mr Morgan replied: “We have to make sure we can deliver in this year. We haven’t mucked up month one and month two.”

NHS services in Shropshire are expected to have a total budget allocation of some £1.456billion this year.

But with a “do-nothing scenario” the system’s deficit could balloon to £165.1million by 2027/28, the report says.

Ms Skidmore has put forward a three year plan to deliver an underlying break-even position within three years, starting now.

Her report says that the health ‘system’ has “made great strides in improving financial grip and control.

“We have a much clearer view of what has been driving our deficit and also about what we can do to address that.”

She writes of the prospect of “making some difficult decisions.”

Ms Skidmore writes: “Instead of spending more, we need to focus on using our resources differently, allocating funding where it creates the most health value by focusing on improving quality outcomes for patients.

“Where application of our current resource allocation does not support this agenda, we will need to make some difficult decisions about future spend.”

She adds that a “continued focus on transformation, innovation, and cost management therefore remains critical.”

The report identifies areas for cost ‘opportunities’ of £30million from the £312million Hospital Transformation Programme (FutureFit); some £37.5 million from urgent and emergency care.

It also sets out workforce savings of £20million from ‘non clinical’ back office functions, replacing agency with bank staff, reducing vacancies, sickness, turnover and unavailability.

“Right now, our system is spending more than its allocated budget, which means we must take decisive  action to achieve financial recovery,” the report to the board says.

“We operate in financially constrained times and therefore must seek to maximise efficiency and productivity opportunities to support our recovery.”

The report looks into areas where they can “reduce the need for hospital treatment” including investing in prevention and “proactive care.”

They also want to shift care closer to home by expanding community-based services to ensure people receive care in the “most appropriate setting, reducing health inequalities across our rural population”.

Officials also see more use of technology and increased use of virtual wards using remote monitoring tools to check patients.

The report says the strategy has been developed in close collaboration with NHS providers, Local Authorities, and wider system partners.

They say it “sets a shared vision for financial sustainability and system transformation to address our underlying deficit through tackling the drivers of excess cost which total over £129m.

“Ultimately, this strategy is about more than just controlling costs.

“It is about maximising how we use our funding to build a stronger and more equitable health and care system for the people of Shropshire, Telford and Wrekin; ensuring that every investment we make drives sustainable value, improves outcomes, and delivers on our shared vision for the future.”

The board approved the plans.