Nottingham hospitals planning £160m cuts to close budget black hole

The Queen's Medical Centre in Nottingham
The Queen's Medical Centre in Nottingham -Credit:Joseph Raynor/ Nottingham Post

Nottingham's hospitals are set to make cuts of at least £80m for each of the next two years in a bid to close a budget deficit. Nottingham University NHS Trust (NUH), which operates the Queen's Medical Centre and City Hospital, overspent by £71m more than anticipated over the past year due to escalating costs, strikes and increased demand.

A new financial strategy aims to save £86m in 2024/25 and an additional £80m in 2025/26, with the goal of balancing the books by the end of that fiscal year. While specifics on the cuts are yet to be revealed, the trust has not dismissed the possibility of job losses to decrease its significant wage bill.

Senior managers have assured that any cuts implemented will not compromise patient safety. Other cost-saving measures include reducing expenditure on costly agency staff, which has surged by 60 percent since the pandemic, and not always replacing staff when they depart.

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NUH cites rising infrastructure costs for ageing buildings and the end of extra funding during the pandemic as additional pressures. With a £1.7bn annual budget equivalent to £4.4m per day and more than 19,000 employees, Chief Financial Officer Paul Matthew said: "We are currently facing financial challenges and have produced a comprehensive financial plan to reduce our deficit and achieve a breakeven position by April 2026.

"Our financial plan aims to support us in making significant savings over the coming years but will do so in a way that does not compromise patient safety.

"We know there is more work to do, especially to reduce our pay bill and we cannot rule out a reduction in posts in the future. We know this will be unsettling and want to make it clear that in these circumstances our priority is to protect jobs and avoid compulsory redundancies."

During a meeting of the Trust's board on Thursday (May 9), he said that the cost-cutting targets were "very ambitious", yet he remained confident they could be achieved. It's understood that several other large city NHS trusts are anticipating similar deficits in the upcoming years.

Approximately half of the savings for this financial year have been identified, and efforts will soon commence on those for 2025/26.

Chief Operating Officer Lisa Kelly said: "There is no doubt this is a challenging plan. Looking ahead to future years so early may be common in business, but as the NHS goes this is a real challenge."

Chair Nick Carver added: "We want to be open to the public about the challenges we're facing - most of which are shared with the wider NHS."

The savings targets are contingent on no further strikes over pay by junior doctors, which are significantly costly to hospitals. Sherwood Forest Hospitals NHS Foundation Trust, which operates King's Mill Hospital, also encountered an unexpected £11m deficit over the past twelve months, driven by similar factors.