Royal Cornwall Hospitals Trust imposes three-month job freeze
Bosses say staffing accounts for more than half of their costs
The Royal Cornwall Hospitals Trust (RCHT) has announced a freeze on jobs after finding itself with a budget deficit of almost £3.5m. The trust’s position is not helped by its pay expenditure currently being £3.44m above its financial plan.
A spokesperson for RCHT – which oversees the Royal Cornwall Hospital at Treliske, Truro, St Michael’s Hospital, Hayle, and West Cornwall Hospital in Penzance – said: “As we take steps to ensure we live within the funding available to us, we have introduced a temporary pause on new recruitment for the next three months. There will be exceptions, as safe care and continuing the progress we are making in reducing waiting times will always remain our priority.
“Staffing accounts for around 60 per cent of our expenditure and the recruitment pause is one of many financial recovery actions, as we explore all opportunities to deliver services more efficiently.”
It stated that at the end of July, the trust’s financial position was £3.48 million away from that planned at this point in the 2023/24 financial year.
RCHT is the main provider of acute and specialist care services in Cornwall and the Isles of Scilly. It serves a population of around 470,000 people, a figure which increases significantly during the busy summer holiday months. The trust employs approximately 6,700 staff and has a total budget of approximately ÂŁ580 million for the provision of services at the three main sites with approximately 750 inpatient beds.
The overall financial position in July saw a total expenditure of ÂŁ225.9m against a total income of ÂŁ221.8m alongside a ÂŁ0.6m budget, leaving a ÂŁ3.5m deficit.
A financial report to a RCHT board meeting today (Thursday, September 5) gives the latest data, stating that as well as pay expenditure being ÂŁ3.44m above plan, non-pay expenditure is ÂŁ2.67m above what was budgeted. Cumulatively, agency expenditure is ÂŁ5.96m against a ÂŁ5.88m plan, while capital spend is ÂŁ2.41m behind plan.
The report adds: “The break-even financial plan is considered as high risk with a significant emphasis on delivering RCHT’s £32.5m Cost Improvement Plan (CIP). At the end of July, there was an overspend against financial plan of £3.48m. The key components driving the overspend is a shortfall in the delivery of CIP, manifesting in our pay expenditure run rate being too high and the cost of industrial action.
“Despite submitting a break-even plan, if the trust reports a material variance to this in year, there is a risk of intervention and regulatory action from both the Integrated Care Board (ICB) and NHS England (NHSE). The trust continues to provide a full financial forecast as part of the close-down process and will now be reviewing with care groups on actions to reduce the forecasted position.”