NHS trust plunges back into crisis

Bosses at NHS North Yorkshire and York, which funds health services across the county for 800,000 people, say there has been a "serious deterioration" in their financial position.

They are warning a "range of actions" will need to be taken to cut expenditure likely to include measures to reduce hospital admissions and tackle rising drug bills although officials claim they still expect to break even.

Figures published today for the six months to the end of August show overspending of 13.5m which could translate to a full-year deficit of 27.7m on budgets of around 1.2bn.

The organisation ran into financial difficulties in 2009-10 and only broke even following a deal with other NHS trusts in the area and a last-minute injection of cash.

The emerging difficulties mirror those in past years when the NHS in parts of the county was routinely heavily in debt, leading to the combined deficit becoming the highest in England in 2006.

The position is further complicated since the trust must make massive savings worth 1.5m in management costs in coming months on instructions from Ministers to cut bureaucracy.

The restructuring, with the potential departure of expert staff, will be carried out at the same time as the trust tackles the emerging financial difficulties which could significantly hamper efforts to find savings.

Adrian Snarr, interim director of finance at NHS North Yorkshire and York, said: "Our year- end forecast is breakeven. However, there has been a serious deterioration in our financial position and we are drawing up a range of measures to reduce expenditure, in addition to the savings that need to be achieved through our Quality and Productivity programme.

"The measures we are considering will ensure we can sustain good quality and safe NHS services for our population during the forthcoming year."

The primary care trust in North Yorkshire, which will be abolished by 2013, had planned a number of measures during 2010-11 to save cash worth more than 24m including reducing emergency hospital admissions, increasing day case work and cutting lengths of stay in hospital.

But many programmes are behind target and now managers are looking for one-off savings due to be discussed by managers at a meeting today.

The persistent financial problems which have dogged health services in North Yorkshire also raise further questions about plans by the Government to shift responsibilities for running services to GPs from 2013.

Conservative Health Secretary Andrew Lansley unveiled the most radical package of NHS reforms seen in decades in July, which he claimed would "put patients right at the heart of decisions about their care, and clinicians in the driving seat on decisions about services".

But national concerns have already been raised that family doctors are ill-equipped to assume managerial responsibilities and will be unwilling to take over control if they face major financial risks.

The financial situation could significantly worsen in coming years since the NHS will have to make do with minimal increases in funding, prompting fears of wider problems in the NHS which has been ordered to find 20bn of savings.