UNISON Eastern

Region
BRIEFING NOTE
NHS South West Essex: Panic
cutbacks put vital services at
risk
The Turnaround Report presented to the Public Board meeting of
NHS South West Essex on September 29 spelled out a series of
drastic measures to tackle what it described as its “extreme
financial difficulty”.

The proposals outline cuts totalling £52m over two

PCT allocation
years. The implications for the local area include a £665m
loss of at least 500 NHS jobs (90 from the PCT’s Its spending rate
own commissioning function, and over 400 from has risen from £52.7m
Basildon & Thurrock University Hospital – per month to £59.6m
equivalent to 10 percent of the workforce): in since April 2009
addition the heavy cuts in mental health and (13.4%).
community services seem likely to result in further
job losses – a body blow to the local economy, as Savings targets
well as a threat to the quality of care, as fewer staff £21.7m detailed plans
are left to shoulder a rising workload. £6.7m “new ideas”
£14.5m one-off savings
The consequences for patients will also be severe:
• a 2-week total standstill on elective The PCT was in
inpatient and daycase treatment across all
surplus up to
hospitals, and a 4-week standstill in
November 2009, but
outpatient activity are proposed as a
this has now been
desperate means to drive up waiting times
turned into a £3.7m
and “save” money by treating fewer patients
monthly deficit.
in 2010/11.
• A further 2 week delay could bring the
total extension of waiting time up to an extra 4 weeks for
elective and daycase patients and 5 weeks for outpatients.
• Large numbers of treatments would be “decommissioned” –
i.e. no longer available for SW Essex patients – to save £4.2m
next year, in addition to restrictions on outpatient referrals.
• Mental health services face brutal cash-driven cuts
regardless of patient needs:

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 • and HIV/AIDS patients could have their life-saving drugs
withdrawn to save 15% of the current £6.5m budget.

These Turnaround proposals, which also included emptying out the

PCT’s reserves to leave no provision for any contingency between
now and the end of the financial year, were nodded through at the
Board meeting, with not the slightest show of doubt or dissent from
the non-executive Board members present. This inevitably raises
doubts over how much these Board members have understood and
recognised the scale of the decisions they have been taking, and
how seriously they take their paid role as custodians of local health
services.

The document itself does not make it easy for PCT Board members,
health workers or the wider public to get to grips with the proposals:
it is confusingly structured, gives different figures for the same
things on different pages (e.g. the savings from PCT commissioning,
given as £3.6m in 2011/12 on pages 23 and 28, but £6.3m on page
56), and appears to make successive rounds of cuts to the same
services (e.g. outpatient referrals and follow-ups), with no attempt
to show the links or differences.

The largest single cutback, a one-off £8.4m to be “saved” by

increasing waiting times for all elective operations, is mentioned in
only one place (page 44), and is not included in the summary
figures at the back. A 51% (£4m) cut in public health is also
reported (page 56) but with no detailed explanation or timescale.

To make matters even more confusing, the totals for the major
reductions listed (as tabulated here on page 3) add up to £33m in
2010/11, and £47.4m in 2011/12 – a total of £80.4m rather than
the £52m discussed as the target.

Either way the biggest losers are acute services, community

services and mental health. Basildon Hospital is apparently set to
shoulder the full brunt of the acute cuts (page 54), which are
presented as totalling £9.2m but if the savings from lengthened
waiting times are included stack up to £17.6m this year,
equivalent to 10% of its 2010/11 budget from SW Essex, and
£23.6m next year. Community services face combined cuts over
two years of £10.5m, reversing several years of growth, and facing:
and mental health and Learning Disabilities face £9.6m of cuts
over two years.

The PCT allocation for this year is £665m, and the cutbacks that
have been proposed and now endorsed are variously described as
representing 8% of the PCT resource limit (cover sheet) or 6% of
the 2010/11 gross budget (page 46). Either way the
consequences could be very serious in all sectors of health care.

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 Despite the serious situation, few of these proposals are to be put to
the public for any form of consultation: “stakeholders” are defined
as GPs, Trusts, local politicians and MPs: the public is to be dealt
with through a “communications plan”, but not asked for its views
or feedback, unless major additional changes are proposed as a
result of the Community Hospital Review (p4).

UNISON, the largest health union, is seriously concerned not only at

the threat to jobs and working conditions as vacancies are left
unfilled and remaining staff are expected to cover an ever-growing
workload, but also at the overall threat to services. Our fear is
that some of the more vulnerable patients and members of
the Essex public will suffer the most as a result of these
cutbacks, very few of which has been described as temporary. Many
of the cuts appear to our members to be short-sighted and carried
out by managers with little understanding of the longer term costs
and consequences involved.

Major cutbacks proposed in SW Essex

Turnaround Plan
Which
2010/1 2011/1 pages
Cutback planned 1 £m 2 £m in plan
Extend waiting times 8.4 0 44
Decommissioning (“service 1.5 4.2 30, 32
restriction”)
Decommissioning “non-essential” 0 1.5 30, 33
Unplanned care “Other” 2.0 2.4 23
Out patient referral management 0.3 0.4 23, 24
Outpatients reduce follow-ups 0.8 2.3 23, 25
Close outpatient services at Brentwood 0 0.5 30, 33
CH
Reduce Outpatient referrals 0.2 1.3 30, 32
Reduce Outpatient follow-ups 0.3 1.4 30, 32
Switch day cases to outpatient tariff 0.6 2.0 30, 33
“Unbundle” tariff payment to BTUH 0.5 2.2 30, 34
Additional “Other” unplanned 0.4 1.3 30, 34
IVF 0.4 0.8 30, 34
Coding (assumed 30% errors) 2.3 2.3 23
HIV/AIDS drugs 0.2 1.0 30, 33
Acute services main schemes 17.9 23.6

SWECS “efficiency” 2.3 0.4 23, 27

SWECS decommissioning (various) 0 2.5 31, 37-
42
SWECS renegotiate contract 0 2.5 31, 37
Community Hospitals: bed closures 0.4 1.7 23, 27
Coach House nursing home 0 0.7 30, 35

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 Community Services 2.7 7.8

Mental Health 2.0 3.4 23, 24

Renegotiate MH contract 1.5 1.7 30, 35
Specialist Mental Health 0.1 0.5 30. 35
Outlook nursing (LD) 0 0.4 30, 35
Mental Health & LD 3.6 6.0

GP contracts 0.5 1.1 23, 26

GP Prescribing 1.6 2.1 23,26
GP contracts 0.1 1.0 30, 36
GP Practice Based Commissioning 0.5 0 44
2.7 4.2

PCT including 90 jobs cut (25%) 0.4 3.6 23, 28

Public health (no details; 51% cut ? 4.0 0 56

2010-11?)

Decommission private diagnostics 1.7 2.2 23, 24,

Total of major cutbacks 33.0 47.4

Among the biggest cuts not yet discussed:

• Mental health services are targeted for a one-off £2m cut in

spending with South Essex Partnership Trust in 2010-11, and
£3.5m of savings next year: contracts are to be renegotiated
“on the basis that the current contract is unaffordable”;
• SW Essex Community Services (SWECS), which have
already been targeted for an ambitious 12% (£8m) “cost
improvement programme”, are to be cut by another £2.5m,
with significant cuts in services at Brentwood Community
Hospital, including the closure of 17 of the 50 beds. The
hospital was recently built at a cost of £32m, and is set to cost
the NHS £151m over 30 years of repayments.
• A “service restriction policy” will seek to save £1.5m this
year and £4.2m next year by barring access to a growing
number of procedures described by the PCT as “of limited
clinical effectiveness” (p32).
• More than 90 jobs in the PCT’s commissioning operation
(which mushroomed by 52% between 2007 and 2010, to 358
staff) are to be axed to through voluntary and compulsory
redundancies, to save £400,000 through non-replacement of
those leaving this year, and £3.6m next year.
• GP contracts are to be cut by £500,000 this year and £1.1m

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 next year by measures including putting contracts out to
tender;
• Drug treatment for HIV/AIDS patients is to be slashed by
£1m (15%) from a budget of £6.5m, despite warnings from a
leading clinician in the public Board meeting that such cuts
would inevitably mean cutting off drugs to patients who would
die without them.
• IVF treatment is to be scrapped for the remainder of
2010-11 other than for recovering cancer patients, to save
£400,000 this year and £800,000 in 2011/12. This comes
despite the public assurance just six days previously by Health
Secretary Andrew Lansley that the NHS “has a responsibility
to provide fertility services”.1

The context

The PCT Board concedes that the problems have arisen more
sharply than expected, as a result of a £21.1m overspend so far on
the 2010-11 budget: and because few of the £21.7m cost
improvement plans previously agreed have been delivered, leaving
a gap of £42.8m. So consistent and drastic has been the shortfall on
efficiency savings and cost improvement plans that the PCT also
argues the need to cost in a further 20% margin, a reserve of
£8.6m, to ensure the books are balanced.

The cutbacks follow very substantial increases in spending in the

last two years, up by 43% from £504m in 2007-8 to the present
unaffordable £723m:
• Acute services spending, the largest single share of PCT
spending has increased by 13.6% since 2008;
• Community Services (SWECS) have increased spending by
90% (£31m), with 40% of that increase (£12.4m) accounted
for by newly commissioned services;
• Primary and Community care spending has grown by 63%
(£65.2m);
• Mental health spending, by contrast, has increased by just
8.5% in the same two years.
(figures from Board paper page
13)

The PCT warns that some of this increase in spending is

“unavoidable”, leaving “£155m addressable spend growth”. The
cuts therefore fall very heavily on front-line services.

The paper presented to the Board on September 29 therefore

1
‘Bosses to blame for health trust crisis’, Prestwich Advertiser 23 September
2010,
http://menmedia.co.uk/prestwichadvertiser/news/s/1328651_bosses_to_blame_for
_health_trust_crisis

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includes:
• Details of how the existing £21.7m schemes are to be carried
out
• £6.7m of new savings ideas
• £14.5m of non-recurrent items” that might help to make up
the gap.

However it warns that almost £6m worth of proposals face a

“high risk” of not being achieved: some are dependent upon
external organisations which cannot be controlled by the PCT.
Among these high risk schemes are:
• The proposals to save money by limiting the numbers
needing emergency or urgent (“unplanned”)
admission to hospital. This saves money from hospital
care, but requires more services delivered at the community
and primary care level, and is a notorious area for fudging
over costs, staffing etc. Without details on how this policy is
to be implemented, UNISON remains unconvinced that the
promised £2m savings could be achieved.
• Mental health: the PCT asserts that costs of mental health
services are higher in SW Essex than elsewhere, and calls for
cuts without giving any details: but there is no guarantee that
imposing cuts of the scale required this year and next on the
South Essex Partnership Trust will not create additional
problems. The premature discharge of patients from inpatient
or from community-based services can result in much greater
distress to them, their families and local communities.

Under the heading of “decommissioning”, the PCT also admits

that some of its additional proposals require the cooperation of
external bodies, notably the planned “significant reductions” in
activity at Basildon Hospital. Senior managers at the hospital
have suggested to UNISON that the impact of the various planned
cutbacks on the Trust could require as much as a 10% reduction in
staff (some 400 or more jobs).

Community Services are also to be decommissioned, even at a

time when the PCT is keen to divert care away from hospital
settings: the main savings are targeted for next year, but it appears
that the PCT is failing to connect the dots and grasp the implication
of its own policies. The new Community Hospital in Brentwood,
expensively built under the Private Finance Initiative, is to have both
its beds and its outpatient services cut back: but the core costs of
the building, in the form of the legally binding “unitary charge”, will
not be reduced as a result: instead it is set to rise each year, and
will continue to be a problem for the Trust for the next 27 years. The
guaranteed long-term profit stream for the PFI consortium in
Brentwood is in stark contrast with the loss of jobs and services
inflicted by the PCT plans elsewhere in SW Essex.

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Another aspect of decommissioning is the “extension and better
enforcement” of the PCT’s “service restriction policy”, which is quite
simply a list of services excluded for SW Essex patients, many of
which are still available to patients in other parts of the country.
This exclusion of 207 treatments and procedures creates a
new “postcode lottery” of inequalities in the NHS.

It is not clear from the Turnaround paper whether or not the list is
related to the list of “non-effective interventions” drawn up by US
management consultants McKinsey last year – a list which also
offered no clinical evidence to support the assertions. However it
does appear that SW Essex, like McKinsey, believe that some
hip and knee replacements fall into the category (page 61).

The PCT document compounds the confusion, by failing to publish a

full list of the excluded services – giving only a few examples from
its current list of 94 treatments, and a further 113, which it
has now added to the excluded list. The PCT also gives no idea
of the numbers of patients who may fall foul of this new attempt to
impose rationing of care, although we are told that a total of £9.2m
was spent on such procedures last year.

The relatively low level of savings that the PCT expects to generate
from this (“60% of spend on codes within the existing policy and
30% of spend on the other identified codes”, p32) suggests that
they do not expect many GPs to take the new guidelines seriously: if
patients continue to be referred for treatment, it is fair to assume
that Basildon Hospital will continue to comply with GP requests.

Additional Comments:

Extended waiting times

SW Essex would be one of few PCTs that have so far opted for the
desperate tactic of deliberately stretching out waiting times to force
effectively one month’s activity into the next financial year. Since
there is no significant real terms increase in funding next year, this
simply stores up a problem for later, and also begins to undermine
the improvements in services that have arisen from years of
investment in the NHS.

Community Hospitals
It is conspicuous that the increase in the PCT’s estate costs is
largely attributable to the £32m Brentwood Community Hospital,
opened a couple of years ago, which has been expensively financed
under the Private Finance Initiative (PFI).
PFI payments famously take no account of the ability of the Trust or
PCT to pay, and are indexed upwards each year. “Unitary charge”
payments of £4.6m this year increase inexorably to the point of a

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£10m final payment in 2037, giving a total cost of £151m, almost
five times the capital cost of the hospital.

17 of the 50 beds have already been closed, and the Turnaround

plan looks to axe more such beds in the forthcoming “review”: but
the fixed and rising cost of PFI means that the only savings from
closing these beds will be through cuts in clinical staffing – nurses,
doctors and health professionals – while the bill for maintaining and
servicing the hospital remains untouched.

So the question is, how many staff are the PCT looking to squeeze
out of their jobs at BCH to generate their “saving”?

Mental Health and Specialist Mental Health

As with many of the cutbacks, the plans to scale back sending on
mental health services are driven entirely by cash concerns, and
give no idea of the numbers of patients whose care may be
affected. As the PCT’s own figures show (page 54) mental health
services have grown more slowly than other sectors of the NHS in
SW Essex, and now face a hefty 6% cutback.

The plan to renegotiate the contract with the South Essex

Partnership Trust “on the basis that the current contract is
unaffordable” subordinates patients’ needs to the PCT balance
sheet. Cuts which force the premature discharge of patients from
mental health services on cash grounds can have a profound impact
on service users and their families.

Savings on the scale required by the PCT are also certain to mean
loss of jobs among dedicated front line staff, resulting in a loss of
quality even where services appear to be maintained. Moreover
reducing staff numbers in some sectors of mental health care can
put staff and patients at greater risk.

None of these issues appear to have been taken into account by the
PCT.

IVF
Here too the PCT plan gives no idea of the numbers of patients who
might be affected. If we assume the NHS cost of a cycle of IVF
treatment is £5-£6,000, then a cut of £400,00 is between 65-80
cycles of treatment cancelled: twice as many are to be cancelled
next year.

This too is an example of the “postcode lottery”: Andrew Lansley

only a week earlier told NHS Bury that they had an obligation to
offer comprehensive health services including IVF, while SW Essex
residents are to be denied it on the NHS. Some of those denied the
treatment will already have been involved in preliminary tests and

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treatment, and will be most distressed at being denied access to the
service.

Of course those with money to spend may be tempted to pay the

much higher rates for IVF treatment in the private sector: this is a
clear example of the inequalities that will arise from cuts packages.

Diagnostic services
The decision to cancel some contracts with private providers could
be seen as a positive move by the PCT: however the cutback is not
coupled with any corresponding increase in resources for in-house
diagnostic tests by NHS providers.

Once again the PCT has failed to spell out the numbers of tests and
scans involved, or to give any details at all apart from the bare
bones figures.

There is a danger, therefore that the restriction of access to

diagnostic services could therefore delay vital treatment, cause
distress to patients, and pile pressure on NHS professionals
delivering front-line diagnostic services.

Cutting back on care

The plan to cut spending on the Coach House and on nursing
support to the Learning Disability services in Outlook both cite the
cynical argument that it is assumed that Essex County Council
social services will provide adequate care.

Since PCT bosses know full well that local authority cuts are bigger
and more immediate than NHS cuts, this flimsy excuse is not
enough to hide the obvious buck-passing and abandonment of
vulnerable groups of service users.

Conclusion

The Turnaround Plan manages to be both heavy handed and

unconvincing. Its figures are inconsistent, even incoherent.

There is not the slightest pretence of concern for the needs of local
patients, or inclination to consult the views of the local public:
instead the results of the PCT’s own miscalculations are to be
dumped upon local NHS providers – Basildon Hospital, SWECS and
SE Essex Partnership Trust.

The cuts on the one hand appear to be too big to tackle the
identified spending gap, and on the other they appear to be double-
counting the same cuts and exaggerating the extent of the savings
from particular measures.

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Nothing in this document gives any grounds for confidence that the
SW Essex PCT which got itself into this mess is competent to resolve
matters and chart a way forward that minimises the damage to
patient care and the quality of services.

Drafted for UNISON Eastern Region by John Lister

October 4, 2010

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