Nottingham hospitals ordered to reduce staff costs after £43m budget blackhole revealed

Nottingham hospitals’ more than £40m budget blackhole is a ‘significant concern’ and costs will have to be cut, according to NHS bosses. NHS England has said the “deteriorating financial position” of Nottingham University Hospitals Trust, which operates Queen’s Medical Centre and City Hospital, could mean the trust is breaching the terms of its licence.

The body, which leads the NHS in England, said NUH had a £43.8 million shortfall by October 2023 – when it had planned to break even in the 2023/24 financial year. The trust forecasted it could accumulate £69 million of unmitigated risk by the end of the fiscal year, NHS England added.

Julie Grant, NHS England’s director of strategic transformation for the East Midlands, acknowledged the trust had been impacted by other pressures in a letter to NUH boss Anthony May but warned the deficit was among the largest in the Midlands. “Whilst recognising there have been significant external pressures outside the Trust’s control, these nonetheless do not provide a full explanation for all the concerns,” Ms Grant said in January.

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“The scale of the deficit risk is of significant concern and is one of the largest in the Midlands region both in absolute numbers and as a percentage of income.” The senior NHS leader also raised the alarming rate of spending on the hospitals’ staff, which she labelled unaffordable.

“The trust has reported significant growth in workforce over the last three years which is not financially affordable and has not led to a corresponding improvement in implied productivity,” Ms Grant said.

The trust’s workforce had grown by 3,337 (21 per cent) since 2019/20 and pay costs by £282 million (40 per cent), the letter added. “This has continued and at month seven (October 2023) had grown by 8.8 per cent in the last 12 months,” she said.

“The growth in workforce costs does not demonstrate financial control or delivery of financial plans.” An external review of NUH’s financial controls identified “control weaknesses and variable maturity of financial control measures” across the organisation.

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