The first NHS trust to admit it was freezing all but the most "essential" nursing and medical posts to balance its books for an indefinite period was St George's Healthcare NHS trust. What is increasingly evident is that it is unlikely to be the sole NHS body faced with a heaving financial deficit to resort to a clampdown on staffing levels.
Cutting staff is the grim reality to emerge from the announcement made last month by the healthcare watchdog, the Healthcare Commission, that a third of NHS hospital and primary care trusts were in debt to the tune of £499m.
Putting aside the "underspends" by fellow trusts, the gross deficit runs to £650m. The government puts the problem at just £140m because its calculations offset the collective black hole with collective surpluses of not only NHS trusts and primary care trusts (PCTs), but strategic health authorities (SHAs).
Government policy on deficits is that the NHS structure overall must live within its means, so one trust's overspend must be matched by another's underspend that year. In circumstances where a surplus cannot be generated in the following year, SHAs can agree to a recovery plan which phases the recovery of deficits over a number of years.
But whichever way the figures are dressed up, the threat of backdoor cuts to the most expensive part of patient care looms. Acute trusts spend on average 30% of their budgets on staffing their wards, with nursing making up the largest part of the patient care workforce.
According to the NHS Confederation, a significant proportion of the extra £5.9bn invested in the NHS budget last year was spent on employing new staff to accommodate demand for NHS services, maintaining competitive pay levels to attract the best staff. But healthcare unions say they are now hearing of similar plans to cut staffing up and down the country, which they warn could jeopardise patient care. North-west London strategic health authority has seen its projected financial deficit this year balloon from £59.7m to £94.4m, with only one of its trusts not in debt. A review of patient services is likely to be announced, and the authority admits it cannot rule out the prospect of recruitment freezes being proposed as part of the trusts' recovery plans to halve its deficit this year.
And the problem is not just contained to London. Bedfordshire and Hertfordshire SHA, faced with a projected £44m deficit, has called on trusts to deliver a 5% reduction in total staffing costs, including agency staff.
Other SHAs, responsible for performance managing hospitals under their watch give cautious responses to the question of possible staff recruitment freezes and cuts. Norfolk, Suffolk and Cambridgeshire SHA says it does not have a "blanket" recruitment freeze in place at the current time, which suggests some are in place, or envisaged for the future. "Whilst workforce is an important part in achieving financial balance it is not the only factor [in the] recovery plans," a trust spokeswoman said.
Another trust, Cumbria and Lancashire SHA, is angling to achieve financial balance but claims it holds no information on recruitment freezes in its backyard. "Hospitals are free agents and don't have to tell," a spokeswoman said.
But what caused the deficits in the first place? The NHS Confederation cites pay modernisation as one source of trusts' financial embarrassment, much to the irritation of healthcare unions who point out that the government earmarked extra funding for the new pay schemes.
The King's Fund nods to the pressures faced by NHS trusts to meet elective care targets on the one hand, while seeing rising demand for emergency care on the other. Some have therefore over-reached themselves.
Unions meanwhile believe the key driver behind the scramble to sort out the financial mess is the race to readiness for competition in the new NHS marketplace under the new financial mechanism underpinning patient choice, payment by results.
From next April, hospitals will be paid for each treatment patients receive according to a national standard price (tariff). This will make funding more sensitively tied to the number of patients coming through a hospital's doors, at the very time that patients will have greater choice about where they go to receive treatment.
Financially buoyant hospitals which do not have a deficit to correct will therefore become stronger, as debt-ridden hospitals try to do more with less to get ready for the new system. The situation seems to be a zero sum game, with real choice in quality patient care most at threat.
The Royal College of Nursing claims intelligence it is collecting from union reps shows that some organisations are talking about losing hundreds of jobs by natural wastage, some of it linked to deficits, others to service reconfiguration. Together with Unison, which also represents NHS nurses, the fear is that trusts will put savings over quality patient care. Since two-thirds of patient care is administered by nursing staff, their concerns are the most tangible to grasp. Unison also points out that St George's NHS trust, which now has an ongoing recruitment freeze, has a 12% turnover of staff, which means its 12% vacancy rate will grow over time. A recent report by the Healthcare Commission on ward staffing points to the truism that "the practice of 'freezing' vacancies whenever there are short-term cash-flow problems makes it more difficult to attain low levels of vacancies, and because temporary staff are likely to be used to fill these vacancies, this is also unlikely to ease the cash flow crisis". A case of penny wise, pound foolish.
The same report nods to the "very strong relationship" between patient satisfaction and the relative proportion of registered (qualified) nurses.
The government says one should put recruitment freezes in the proper context, namely the growing NHS workforce now in place which is helping patients receive faster and better care.
Health minister Lord Warner says he respects recruitment decisions as a matter for individual trusts which need to ensure they are delivering the best possible value for money. This requires tough decisions, but with the caveat issued by Lord Warner that there must be "no trade off between service improvement and financial discipline". Squaring the circle will test the most experienced NHS management minds.
