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GPs face inheriting spiralling debt as PCTs plunge into red

By Ian Quinn

Exclusive: PCTs across the country are falling behind on targets for efficiency savings and plunging into the red, leaving GPs facing a wave of cuts to front-line services and the prospect of inheriting a mountain of debt.

A series of trusts that broke even or recorded surpluses last year are now forecasting multimillion pound shortfalls, as managers struggle to implement reconfigurations or find they are saving far less than they hoped.

Half of the 40 trusts surveyed by Pulse are implementing ‘plan B' emergency measures designed to wipe millions from primary-care budgets as they find their initial efficiency drive will not be enough to prevent black holes in budgets.

Pulse's investigation lays bare the growing financial crisis in the NHS, even before the severe tightening of PCT budgets planned for 2011/12.

It will fuel concerns among many GPs about the financial legacy they will inherit when they take over commissioning, following the GPC's admission it would not oppose transfer of ‘routine' debt to consortia.

Six months into the financial year, six of 40 trusts replying to requests for information predicted they would be in the red by the end of 2010/11, breaching their legal duty to break even. Only one was in the red at the start of the year.

A further 14 are implementing emergency packages to avoid slipping into deficit, with two of those already in the red. Trusts plan to raid reserves, borrow money from neighbours and implement swingeing extra cuts – to GP referrals, drug budgets, mental health services and public health programmes.

NHS Hampshire, which last year recorded a surplus of nearly £500,000, needs to make £91.2m savings to break even this year and said it was at risk of an £8.3m deficit.

NHS Warrington said it had cut savings forecasts from ‘disinvesting' in services from £4m to £0.5m and was predicting a £1.9m deficit, while NHS Halton and St Helens said its ‘best estimate' was a £5m overspend.

NHS South Birmingham said it had a ‘significant risk' of falling into the red, forecasting a £14m shortfall against a contingency of £9m. It is planning ‘urgent steps' to stay within budget, including ‘rigorous contract management' and tackling overspending in mental health and GP prescribing.

NHS North Lancashire said: ‘In line with plan B, reserves set aside for investment have been frozen.'

NHS Peterborough is forecasting it will be £3m in the red, after failing to achieve £20.2m of planned savings.

Its chief executive, GP Dr Paul Zollinger-Read, said: ‘We have not made as much progress in some areas as the plan visualised and will ensure we take all actions necessary. It's crucial we provide a firm foundation for developing GP consortia.'

Dr Janice Allister, a GP in Peterborough, said the prospect of inheriting debts threatened to ruin the positive opportunities from GP commissioning: ‘If we are starting from a negative it'll be even worse than before.'

Dr Ron Singer, president of the Medical Practitioners' Union and one of its GPC members, warned: ‘It won't be a clean slate. There'll be very little money left for big decisions.'

NHS chief executive Sir David Nicholson admitted in a letter to NHS managers: ‘A number of PCOs are behind on cost-improvement programmes. These issues need urgent attention.'

Dr Janice Allister PCTs facing deficits

You can zoom in on the map, drag it to see different parts of the country and click on individual markers to see what's happening in your area.

Red markers represent trusts forecasting end-of-year deficits, yellow markers represent trusts taking emergency measures to avoid debt, and green markers represent trusts on schedule to meet savings targets.

View PCT deficits in a larger map