City hospitals to fight planned cuts of £40m

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News: Sheffield Telegraph online 24-hours a day.

Sheffield hospital bosses are challenging potential £40m cuts that are due to take effect from April.

The cuts – which are over £10m more than had previously been expected – have been described as ‘extremely worrying’ by Neil Priestley, the finance director of Sheffield Teaching Hospitals NHS Foundation Trust.

He said the trust, which runs the Royal Hallamshire, Northern General, Weston Park and Charles Clifford Dental Hospital, has issued a ‘very strong response’ to a national consultation on funding changes that will mean less money provided for offering a number of procedures.

Mr Priestley said: “We have achieved break even or a small surplus for the last 13 years and we expect to record a small surplus again during this financial year, albeit we are in a much more challenging financial climate.

“We plan to do the same in the forthcoming year, and with the support of our staff, we are making good progress.

“However the difference in 2015/16 is that the prices we will get paid for a number of our procedures is reducing significantly, along with other changes, which means we will get paid less. This could equate to circa £40m for us as an organisation.

“We have given a very strong response to the national consultation about these changes and explained the impact it has for a trust of our size.”

The trust is anticipating losing at least £41.6m of income in the next financial year due to changes in how services are funded.

Last month, bosses said they expected to have to make efficiency savings of around £30m.

The trust said it had managed to make efficiency savings in recent years without cutting services or making compulsory redundancies.

Mr Priestley said more savings than previously expected are now likely to be required next year.

He said the situation was ‘extremely worrying’ and it was ‘unlikely’ the trust will be able to balance its books next year.

Mr Priestley said changes to tariff payments for different elements of NHS are due to be finalised by the end of this month.

The trust is expecting to save around £25m through its annual 3.8 per cent efficiency target – a cut it was already anticipating.

But it has identified other losses of income equating to £16.6m – only £2m of which was ‘expected’.

Mr Priestley’s report also warned city hospitals could face further funding cuts due to the planned introduction of more financial penalties for missing performance targets and ‘potential further contracting losses’.