But they warn that these financial shortfalls re a warning sign, and they view the current trend in reduction of jobs as the fist warning signs. The advisors feel that the job cuts were mainly due to the deficit of the 2005/06 financial year, but they are of the opinion that they have come in too late to have any effect on that years account.
John Appleby, the chief economist at the King's Fund health think tank said that there are a number of pressures on the primary care trusts (PCTs) and other health trusts this year. He said that in the financial year 2006/07, organisations in deficit after last year will not only have to recover that shortfall but also plan for a surplus. He said that on March 31 when the last financial year ended, each organisation was told: 'It's your deficit do something about it.' He explained that the complication this year would be for them to pay back the amount spent in excess, and also to ensure that they don't end up in deficit by the end of the year.
Appleby also said that trusts will also feel the full effect of Agenda for Change, the costly new pay structure for most NHS staff, while some will be trimming their overheads in anticipation of 2008/09, when it is widely predicted that the rate of growth of NHS spending will fall. It is reported that that the trusts will be pressurised further the new controversial system that governs as to how money moves around the NHS.
The Department of Health (DoH) has decided to curtail the amount of income the trusts can gain. It has reportedly told the NHS that the aggregate number of non-emergency patients treated should not rise by more than 3% in the current year. Many of the trusts are now worried that most of this extra work will go to independent sector hospitals. They have also now limiting the income that the NHS receives from the emergency cases. Appleby felt that this could be a major problem as emergency admissions, which often take up half the hospital beds represent a significant chunk of hospitals' income.
Karen Jennings, head of health for trade union Unison, said that the recent financial difficulties have also left the NHS staff concerned about the future of patient care and their jobs, stating that she believes the NHS will continue to announce job losses and service cuts this year, she said that they at the union feel that there will shortly see a lot of job reductions in new areas, such as PCTs.
Appleby stated in agreement that further redundancies couldn't be ruled out. He felt that there were probably still more to come and, he hoped that vital services would not be cut. He said that losing ones job was definitely not good, but one way of looking at job cuts as a patient and a taxpayer would be that the NHS is finding a more cost-effective way of providing some services.
Jennings felt that the staff fear for their jobs have been strengthened by the new reforms that are aimed at moving care from hospitals into community settings, like GP surgeries and patients' homes, that will further cut income of the hospital. Jennings while supporting the development of community services and greater emphasis on public health, believes the implementation of the reforms is chaotic and is being driven by short-term financial needs. Even trusts that are currently balancing their books will be worried about their future income. It promises to be another tough year for NHS finances.