The Trust needed to recover a cumulative deficit of £18 million in 2006/07 to meet its statutory breakeven duty. It also needed to demonstrate its future financial sustainability for the medium term to be able to apply to become a foundation trust (FT).
The Trust produced an Integrated Business Plan which brings together the financial targets of the Trust, the Trust’s strategy, service development plans and risks, ensuring that its strategy remains at the forefront whilst also endeavouring to make the required savings. The Trust has achieved savings through redesigning services so that they operate more efficiently, through a process of systematic engagement with clinicians and managers at all levels of the organisation.
Clinicians are actively engaged in identifying areas where savings may be made without compromising patient care, and managers, including clinical managers, are held to account for delivering them or finding alternatives. This has ensured that Trust staff ‘buy in’ to delivering the cost improvement programme.
Examples of specific developments are increasing use of day case surgery, the opening of a medical admissions and assessment unit, which is used to assess how best to treat patients on arrival, and ward closures when these wards are no longer required. These have resulted in permanent reductions to the Trust’s cost base.
During 2007/08, the Trust has maintained the improvements in clinical practice which enabled it to deliver a surplus in 2006/07. This year, the Trust has also analysed and explored the impact of future events which will affect its performance in coming years.
Examples of this have been a conference for all affected staff on the implications of reduced monies from SIFT (teaching monies) and how the Trust can deal with this, which has enabled it to identify solutions for a problem which will impact in the future. Again this has enabled that all staff are committed to delivering a solution to the problem.
The Trust is forecast to achieve FT status during 2008/09, which is much earlier than anticipated. In Spring 2006, following the Trust Development Programme, the conclusion of the then Chief Executive of the SHA was that the Trust was at least two years away from application to become a FT, and concern was expressed over the sustainability of the Trust’s cost improvement programme (CIP).
The Trust was then invited to join wave five of the FT application process in the Spring of 2007 and it delivered the planned £18 million surplus for 2006/07 and is continuing to deliver savings from the changes made through the CIP, resulting in a pre-audit surplus in 2007/08 of £10.7 million which would have been higher were it not for non-recurrent losses arising from the impairment of various fixed assets.
The Trust’s Integrated Business Plan reflects its consideration of various scenarios around the loss of SIFT income and the impact of EU Working Time Directive on junior doctors’ working patterns. This shows that the Trust has risk assessed future developments and is actively managing their impact on its financial position. The Trust has maintained the same level of service while becoming more efficient and effective in its clinical service delivery.
The Trust has managed to completely turn around and make huge savings of £18 million in 2006/07 to clear its cumulative deficit and a surplus of £10.8 million for 2007/08. It has a robust plan for achieving savings of a further £14.7 million in 2008/09. Savings are continuing to be made and the Trust is expecting to achieve FT status during 2008/09 as a result of its IBP considering the future impact of the issues described above.