Newspaper article The Evening Standard (London, England)

NHS Trusts Slash Budgets by [Pounds Sterling]250m to Fight Debt Crisis

Newspaper article The Evening Standard (London, England)

NHS Trusts Slash Budgets by [Pounds Sterling]250m to Fight Debt Crisis

Article excerpt

Byline: REBECCA SMITH

LONDON'S NHS budget is being slashed by [pounds sterling]250 million to deal with a debt crisis.

Every health trust in the city is being forced to hand over a chunk of its budget to a special fund being set up to deal with mounting overspends.

The cash will be clawed back from the eight per cent increases in hospital trust budgets announced by Health Secretary Patricia Hewitt and due to kick in next month.

It means their growth in spending will be capped and planned investment will be pruned.

The cut in spending is the equivalent of thousands of operations or courses of drugs being cancelled. If spent on frontline services instead of paying off previous overspends, it could buy a total of 78 MRI scanners-568 ambulances, 2,840 courses of breast cancer drug Herceptin and pay the salaries of 1,560 "modern matrons".

The fund was unveiled after the Evening Standard revealed the health service in London was on track to end the fiscal year [pounds sterling]182 million in the red. But it is certain to face criticism as it penalises trusts regardless of how well they managed their budgets. Those that ended the year in the black will still have to cut budgets by three per cent - meaning they will effectively be bailing out poorly managed trusts.

Today, the move was attacked for failing to address the problem of overspending. Shadow health secretary Andrew Lansley said: "Trusts who have successfully balanced their books will be penalised.

"Top-slicing the budgets by three per cent will make the financial circumstances more difficult."

Dr Jennifer Dixon, director of policy at health think tank The King's Fund, said: "This is a short sharp solution which is probably not sustainable in the long-term.

"But the question is, if you are a health authority in surplus and give your money to one in deficit, do you get it back? …

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