The outgoing Chief Executive for NHS Peterborough gives an account of what went wrong with the budget, and why she tendered her resignation. Broadcast at 07:10 on Thursday 4th February 2010.
STAINTON: Now as we’ve mentioned already NHS Peterborough’s debt has spiralled to nine point six million pounds. We reported last month that the PCT’s Chief Executive Angela Bailey said she was retiring when the shortfall stood at seven million. Well an Extraordinary General Meeting was held yesterday to prevent debts reaching twelve million by the end of March. Angela Bailey is on the line. She’s continuing in post as Chief Executive until her interim replacement starts. Morning Angela.
BAILEY: Good morning.
STAINTON: These are frightening figures aren’t they?
BAILEY: Yes. I agree they are concerning and hence why we held the Extraordinary Meeting yesterday of the Board.
STAINTON: Just remind us how we’ve spent so much over the budget that we budgeted for.
BAILEY: Well let’s remember as you say we spent the money on the population of Peterborough. At the moment the key areas of overspend are the Peterborough and Stamford Hospitals and quite a large proportion of that is around emergency admissions to hospital. In addition to that, our local private hospital, and I must emphasise we pay exactly the same for the local private hospital as we do for our main hospital in Peterborough, we also have I think it’s one point eight million overspend there. And again, they are operations that people need and they are operations that ensure that we are shortening waiting times, to get us down to eighteen weeks from the point at which someone sees their GP to when they’re treated. The other big areas are Addenbrookes Hospital and Papworth Hospital, which between them are almost another two million. So again, some of those are paediatric intensive care cases, that have gone down to Addenbrookes Hospital, multiple births, where the mother and those babies actually had to be kept in intensive care …
STAINTON: Yes I don’t think anybody wants to stop people getting medical care here, I don’t think that’s the issue really, that people are worried about. I think the worry is that these figures are only up to the end of November, is that right?
BAILEY: Yes but we are predicting .. our predictions at the moment with the actions that we’re taking, is we will maintain them under the ten million by year end. So the actions ..
STAINTON: How are you going to do that, if it’s risen from seven million in November, the overspend, to nine point six million in December? That’s two point six million increase per month.
BAILEY: No …
STAINTON: January, February and March to come.
BAILEY: No. there was a considerable catch-up in that period with issues ..
STAINTON: What was the overspend in November? That was seven million wasn’t it?
BAILEY: That was seven million.
STAINTON: What was it at the end of December?
BAILEY: As you stated, it’s over nine million.
STAINTON: So there’s a two point six million increase.
BAILEY: But as I said there was some catch-up during that as well. If you recall we brought in a new Finance Director during that period, and actually having someone with experience of turnround, that’s actually done some .. a lot of detailed analysis — he has unearthed a number of areas where the predictions that we’ve actually had were not as robust as they could have been, and that’s actually given us some catch-up during that period.
STAINTON: Where does the money come from? These are big figures aren’t they, potentially twelve million, hopefully not. But who do you go to? Because you can’t just keep spending can you?
BAILEY: No. Absolutely not. And any overspend that we have in this year will have to be recovered in next year.
STAINTON: So cuts then for next year?
BAILEY: Well we have approximately thirty million pounds worth of growth next year. So what we will be looking is it will be the first call on growth, and we will be discussing with the Strategic Health Authority how we actually handle that over next year, and the possibility of extending the repayments so that we make sure that the first thing is for us to get back into what we call positive run rate, so our income and expenditure match.
STAINTON: Yes but ..
BAILEY: That’s the main aim. And then the repayment of that debt. And our plans at the moment that we’re building up get us back into positive run rate in the early part of next year.
BAILEY: And then what we will be doing is the paying back. We’ve got quite a lot of schemes where we’re looking at which will make sure that we’re treating people in the right place. There may be .. and I’ve said all along I could not rule out some cuts in service .. but we would make sure that what we were looking at was non-essential services.
STAINTON: Have you got confidence in next year’s budget? Because the people of Peterborough might be a bit sceptical, might they, after this year, going nine point six, potentially twelve million over budget?
BAILEY: And I can understand that absolutely. That’s why we have spent a considerable amount of time already making sure that next year’s budget is very robust, making sure that we’re looking at all the areas where we’ve overspent in this year ..
STAINTON: Yes. You’ve got a plan to save two point seven million by the end of this financial year. But surely you’ve overspent by ten million in nine months. I mean that’s going to be impossible, isn’t it?
BAILEY: No I don’t think it is. I don’t think it is. And we’re working very closely with GPs. In fact we’ve got a meeting this evening with GPs, talking about the areas where we can reduce our costs, where we can make better use of the current services, and make sure that we provide the care that the population need.
STAINTON: Are you embarrassed Angela?
STAINTON: It’s incredible mismanagement, isn’t it?
BAILEY: I’m extremely disappointed, because I’ve been a finance director in Peterborough prior to this post, and whilst many organisations around the NHS have had overspends in previous years, Peterborough’s very proud of the fact that it hasn’t. So I am extremely disappointed.
STAINTON: It’s incredible ineptitude from the people running the organisation, though, isn’t it? Will you be walking away Angela with a nice big pay-off out of this?
BAILEY: No I won’t.
STAINTON: Right. What about the Finance Director?
BAILEY: The Finance Director .. I don’t think it would be appropriate for me to discuss someone else.
STAINTON: I think the people would like to know.
BAILEY: But I can assure you the Finance Director would not be walking off with a nice package and neither will I. I am just taking my normal retirement. I’m taking it early, which means that I actually get my pension reduced.
STAINTON: Right. And a word of sorry to the people of Peterborough for all of this, or not?
BAILEY: I am extremely sorry, because I think next year is going to be a very difficult year. Because we have to recover this. But again, I’ll just emphasise, that this funding has been spent on the population of Peterborough. We knew it was going to be a very difficult year. we’ve got the opening of the new hospital in next year, we’ve got the city care centre and the new mental health facilities that have opened this year. A very difficult year in terms of expenditure.
STAINTON: Well let’s hope we can stay within budget next year. Angela, thank you for coming on this morning. Angela Bailey, who’s continuing in post as the Chief Executive of NHS Peterborough. A predicted overspend of nine point six million, possibly twelve.