Health trust pays millions in redundancy

8:00am Thu Sep 13, 2012

Tweet

The NHS trust that runs Newark Hospital has spent over £3m on redundancy settlements for its staff in the last two years, it can be revealed.

This includes a pay-off of more than £1/4m to a departing chief operating officer, money which the Say Yes to Newark Hospital Campaign says could have been spent on extra staff or directly on services.

Sherwood Forest Hospitals Foundation Trust’s annual report and accounts show that a total of £3,260,000 has been spent by the trust on redundancies from 2010-12.

The report includes details of a pay-off of between £280,000 and £285,000 to former chief operating officer Jane Warder, who left in February.

The accounts refer to the payment as “remuneration relating to a contractual redundancy and notice period payment.”

It includes a confidentiality clause that prevents either party discussing publicly aspects of their terms or conditions of employment.

The secretary of the Say Yes to Newark Hospital Campaign, Mr Paul Baggaley, described the payment as “morally indefensible.”

“How can it be right to pay out extraordinary amounts of taxpayers’ money at a time of austerity when we are being asked to manage with less?” he said.

The campaign chairman, Mr Francis Towndrow, said: “Our trust has employed senior management staff on large salaries, and then overseen their departure paying compensation packages, money that would have been better used employing extra staffing for our hospital.”

The accounts show that in 2011/12, a total of £2,655,000 was spent on exit packages for staff — 113 agreed to leave and there were nine compulsory redundancies.

In 2010/11, there were compulsory redundancies costing £605,000.

The figures do not include Mr Martin Wakeley, who left his position as chief-executive at the end of May having only been in post since October 2011.

Redundancies at the trust were part of cost-cutting measures aimed at helping it cope with a challenging financial position, the main burden being repayments on the £366m private finance initiative that paid for the redevelopment of King’s Mill Hospital, Sutton-in-Ashfield.

The trust is committed to paying around £46m in PFI charges in 2012/13.

PFI charges increase in line with the Retail Price Index and, therefore, the payments increase each year. By the time the contract ends in 2043, the Newark Hospital campaigners say it could have cost over £2bn.

The trust has a financial risk rating of three on a scale of one to five, with one being the highest.

The accounts show the trust had an income of £266m last year, leaving it with a £6.2m deficit.

Mr Baggaley said: “Every year the trust is having to pay more on buildings than on staff, and the impact of that can only be cuts in services.

“It is inevitable that they will spend more and more on PFI and less on services.”

The trust’s deputy chief executive, Carolyn White said: “Where workforce changes are unavoidable, any associated redundancy agreements should reflect statutory requirements and contractual obligations.

“This situation applies to employment in any sector, not just the health sector, and in health the government’s Agenda for Change terms provide the ground rules.

“Against a very challenging market background the trust has met the majority of its key financial targets and performed better than plan in 2011/12 in all key areas.

“The trust is currently partway through a transformation programme with the primary aim of establishing a more sustainable financial future.

“Recognising the need to transform services the Department of Health have made available separate funding for health organisations who can demonstrate that by restructuring their services they can reduce costs whilst continuing to deliver high quality patient care.

“This funding has been separate from the day-to-day running of the hospitals.

“Regarding the PFI concerns, whilst independent specialists show we are performing relatively efficiently, our PFI is relatively large in comparison with our overall size.

“Like other trusts we are facing a future of reducing income from our main commissioners, and PFI commitments are becoming an ever more significant factor.

“High quality patient care remains at the heart of everything we do. We are confident that we are able to achieve a sustainable financial future whilst continuing to deliver the safe and effective services of which we are proud.”