Agenda item

Steve Orpin (Finance Director, Maidstone & Tunbridge Wells NHS Trust) and Ian Ayres (Accountable Officer, NHS West Kent CCG) were in attendance for this item.

(1)       The Chairman welcomed the guests to the Committee. Mr Orpin began by explaining that Maidstone & Tunbridge Wells NHS Trust was one of five acute providers to be part of the first cohort of financial special measures. The new system of financial special measures was introduced by NHS Improvement in July 2016; providers were considered for financial special measures using a small number of criteria including those who had not agreed a control total and those who had agreed a control total but had a negative variance against the plan. He stated that the Trust was moving at pace to rapidly respond and move forward towards an agreed control total. NHS Improvement had identified support including the appointment of Simon Worthington who was Deputy Chief Executive of Bolton NHS Foundation Trust – a Trust which was in surplus and had been rated ‘good’ by the Care Quality Commission. He noted that the Trust was developing a high level recovery plan and would be meeting regularly with NHS Improvement who would review whether the Trust would remain or exit financial special measures.

(2)       Members of the Committee then proceeded to ask a series of questions and make a number of comments. Members enquired about the pay bill. Mr Orpin explained that NHS Improvement had carried out a review and the Trust’s pay bill, in relation to its activity, was growing faster than comparable organisations. He noted that the pay bill (5 – 10%) was growing faster than income activity (4 – 5%). The pay bill accounted for 65% of expenditure and its increase was made up of three key components.

(3)       Mr Orpin stated that the first was increasing activity and demand in urgent and emergency care; there had been a 6% increase in A&E attendance in the first four months in comparison to the previous year and in August there had been an unprecedented spike of serious illness in additional to the expected increase in seasonal accidents. The second was that the human resources market was influenced by the Trust’s proximity to London with staff commuting or moving to London to progress their careers in teaching hospitals. The third was workforce planning particularly for medical surgical specialities. There were shortages of nursing and medical staff in acute frontline services due to constant growth, increased pressure and organisations with quality issues locally which resulted in greater competition for staff. The Trust was working to reduce its agency and temporary staffing through recruitment and the bank process; there had been a 20% decrease in agency and temporary staffing in the previous year with no deterioration to the quality of service. He noted that the Trust was working in collaboration with the CCG to develop new services and expand provision in acute and community settings to serve patients in West Kent which were effective and efficient and provided high quality care.

(4)       A Member asked about the impact of PFI, Mr Orpin explained that within the PFI there was a unitary charge paid for the PFI service. The Trust received £8 million of funding annually to cover this charge; however the actual cost of the unitary charge was £5-10 million greater than the funding received. He noted that the Trust had to identify all additional savings and efficiencies before being able to ask for additional support for the PFI cost.

(5)       In response to a specific question about timescales and exiting special measures, Mr Orpin explained that financial special measures provided the Trust with an opportunity to improve services and reduce cost.  He stated that whilst the emerging plan had not been presented to the Trust Board, the Board was committed to financial recovery and delivery of quality services. He noted that the Board and Finance Committee would be holding extraordinary meetings before the planned meeting with NHS Improvement at the end of September to review progress; this would be the first opportunity were the Trust could exit financial special measures.

(6)       A number of comments were made about the deficit, the costs attached to financial special measures and planning for population and demographic growth. Mr Orpin explained that the deficit was planned by the Trust and NHS Improvement had not accepted the control total which had resulted in the Trust being placed in financial special measures. Mr Orpin reported that the cost of the Financial Improvement Director and their team was incurred by NHS Improvement; it was not a cost to the Trust at the current time. Mr Orpin noted that all providers were experiencing growth and changes to demography as people were living longer with co-morbidities. He stated that the Trust was working on the current issues which would act as a cornerstone for the future. He highlighted the role of the Sustainability and Transformation Plan in planning for population and demographic growth particularly in Ebbsfleet.

(7)       A number of questions were asked about the impact of special measures on staff and efficiencies. Mr Orpin explained that as part of its financial recovery plan, the Trust had actively gone out into the organisation and engaged with frontline staff about improvements to services. He reported that he was impressed with the dedication and ideas provided by the staff including energy saving measures. He noted that work was being done to identify waste at the Trust and by making staff aware of the cost of items when ordering enabled them to make an informed judgement about whether to proceed with the purchase.

(8)       The Chairman asked Mr Ayres to comment. Mr Ayres stated that the Trust was in financial special measures solely for financial issues. He commended the Trust’s leadership team for not accepting an unrealistic control total and stated that he had full confidence in the Trust to resolve the financial issues. He noted that the money provided to the NHS did not cover an aging and growing population or advances in technologies; year-on-year efficiencies would be required to deliver the same level of service currently provided.

(9)       RESOLVED that the report be noted and the Trust be requested to provide an update to the Committee in January.