New cash crisis threatens Charing Cross Hospital

Troubled NHS Trust runs up deficits of £37 million

Local MP Greg Hands has reacted with dismay to a statement by the Health Secretary that Hammersmith Hospitals NHS Trust has run up a deficit of �37 million in the first six months of this year. The deficit is the second largest in the United Kingdom, of more than 250 hospital trusts.

Hammersmith Hospitals Trust, which has already lost one of its three stars due to its financial plight, is to be sent a specialist "turnaround" team from accountancy firms according to a letter from Patricia Hewitt.

The deficit represents more than 9% of the Trust's turnover, and is more than double the �17.8m recorded for the whole 12 months of the last financial year.

Hammersmith Hospital have already announced 300 job losses but hope to lessen redundancies by reducing the number of agency staff used and by leaving vacant post unfilled however. 

The news of the Trust's deficit also raises renewed questions over the future of the Charing Cross Hospital, as the largest hospital in West London was threatened earlier this year with losing much of its specialist services to the Hammersmith Hospital site as a cost-cutting measure. The Trust claims that the cost of refurbishing the Charing Cross is more than �10 million.

Meanwhile, it is unclear how the "NHS Turnaround Team" which includes top accountancy firms will interact with the Trust boss Derek Smith.  Smith is Britain's highest paid health administrator earning more than �200,000 per annum after a 35% pay rise on the previous year. The centrepiece of Mr Smith's administration was the purchase of Ravenscourt Park hospital in 2002. Demand for the services of the new hospital has been fatally overestimated. The number of beds was increased from 16 to 106, but now only an average of 40 are in use.

When it was opened by the then Health Minister John Hutton in October 2003, he said it was a "state of the art facility" and that "this is what investment and reform of the NHS is helping to bring about."

As recently as January 2005, the Government was still praising Ravenscourt Park hospital. In 2004 - 05, Ravenscourt Park Hospital recorded a �11.1m deficit. It is still losing money at �1 million a month. Mr Smith says that the hospital is only doing 6,000 operations of the 10,000 needed to break even.

Greg Hands MP said "The mismanagement of our local NHS hospitals is shocking. Jobs are going, operations being cancelled, state of the art facilities being unused. Now the Government is sending in expensive outside consultants to sort out the mess. Only a few months ago, the same Government was encouraging the Trust to apply for foundation hospital status. "The Government sending in its 'turnaround team' is bound to raise questions over the future of Derek Smith as Chief Executive of the Trust, and Britain's highest paid NHS administrator. "The news of the record deficit is bound to increase speculation over the future of the Charing Cross Hospital, already rumoured with closure by stealth or severe downsizing."

December 6, 2005