Morecambe Bay health trust’s annual spend increased by £18m this year despite enormous pressures to cut costs.
In what University Hospitals of Morecambe Bay NHS Trust’s (UHMBT) financial director described as an “exceptional” year, the organisation spent £281m in the year ending March 31 2013, compared to £263.1m in 2011/12.
Some of the most significant increases included consultancy services, up £3m from £1.5m to £4.5m, drugs costs, up £2m (£16.5m to £18.5m), clinical supplies and services, up £2m (24.2m to 26.3m), premises costs, up £2m, operating lease rentals (including vehicles and new temporary ward buildings at the RLI), up £1.8m, and buying healthcare outside the NHS, up £1.1m. Employee benefits - including staff wages - is the single largest expense and saw the largest increase - up £5m from £169.9m to £184.9m.
Other cost increases included legal fees up from £354,000 to £1m, early retirment costs, up from £56,000 to £739,000 and transport, up £222,000. Chair and non-executive director costs more than doubled from £78,000 to £212,000.
Tim Bennett, director of finance at UHMBT said: “The financial year which ended on March 31st 2013 was an exceptional one for the trust. As has been previously reported there were a number of serious failings in the way we provided services for which we have apologised. Our priority last year was to address these failings as quickly as possible and as has been widely recognised we have made some significant improvements. However, this did have an adverse effect on our finances.”
The trust said it had invested in additional staff and buildings and strengthened its governance arrangements, and saw additional costs for employing interim directors, who have now been replaced with permanent appointments.
Mr Bennett said the rise in management consultancy spend was a one off cost, and was a requirement placed on the trust by the regulator in order to provide assurance that it was dealing with failings in standards.
David Wilkinson, the trust’s director of workforce and organisational development said that it was now essential to reduce staff pay costs, and that the biggest cost of agency spend is locum doctors.
He said the trust’s savings plans include a big reduction of locum, bank and agency usage, with a focus on permanent posts and effective staff rostering. The trust’s target is to save £25m this year.