CHIEFS at Dorset County Hospital have warned staff that it is vital that they save £6million by September or face serious financial implications.

It comes after the Dorchester hospital has now been in breach of authorisation by independent regulator Monitor for a year-and-a-half – since October 2009.

It is one of only four trusts in the country that has been in such a serious position due to its financial situation.

In order to make these cuts the executive team are asking staff to come up with suggestions during these ‘challenging times’ whilst dramatically cutting agency and bank staffing hours.

Chief executive Jean O’Calla-ghan said: “Around 65 per cent of our expenditure is associated with pay costs and the delivery of our cost improvement plan does mean that the current size of our workforce will have to reduce.

“We anticipate that much of this reduction can be achieved through the cost improvement plan and a combination of the careful control of recruitment.”

Sickness absences, annual leave management and natural turnover are all expected to make savings.

Hospital chiefs are also trying to reduce 30 beds throughout the hospital – which is the size of a ward.

Mrs O’Callaghan added: “However, on their own, these actions are insufficient and we need to explore other ways in which we can save more pay costs without the need for enforced job losses.”

In total the hospital needs to make £12million in savings this financial year – before 31 March 2012.

The executive team are working closely with Monitor to outline the savings they are making and have a deadline of September to make £6million worth of savings – to prove they are halfway there and making good progress.

While explaining the importance of these savings to staff Mrs O’Callaghan said: “Although we can only speculate, it is likely that, if we cannot demonstrate good progress by September, Monitor is unlikely to sign us out of breach of authorisation.

“Thereafter if we continue to under deliver, Monitor may have no choice but to implement the final sanction of deregistering the trust licence as a foundation trust.”

She said that this could mean the trust could be run by another healthcare provider – either another foundation trust or even a non NHS organisation.

A Monitor spokesman said: “Dorset County Hospital’s NHS Foundation Trust has been making good progress, but will remain in significant breach until it demonstrates sustained delivery of its financial recovery plan.”

However, at a DCH board meeting last week chiefs said they are confident the savings can be made this year and that every effort is being made to ‘work together to ensure we reduce our costs in a way that does not compromise the safe delivery of patient care’.

Finance director Bill Boa told board members that the agency staff shifts had been halved this month after an ‘extraordinary’ high staffing cost in April.

In that month agency medical staffing totalled £107,000 and agency nursing costs were £85,000.

Mrs O’Callaghan told the Echo that they have reduced the hospital staff’s sick rate to 3.6 per cent – down from four percent which will show considerable savings.

They are also holding talks regarding sharing a number of services with neighbouring hospitals such as Poole and Yeovil.

She said that she wanted staff to be kept in the picture regarding the cuts that need to be made.

“We don’t want to focus on it – but we need to get a balance without scaring everyone,” she said.

“We just want everyone to be on board.”

The financial nips and tucks

The hospital was plunged into crisis in October 2009 when the chairman of the trust Robin SeQueira quit after 12 years service stating the hospital faced a ‘difficult period’.

A month later interim chief executive Derek Smith announced that 200 jobs would be axed in the next year in a bid to control a projected £7.4million deficit. Residents, staff and patients were up in arms about losing essential services in the months that followed.

It was later revealed in July 2010 that the interim chief executive was paid £2,557 a day for just 97 days work.

However in February this year, under the helm of newly appointed chief executive, Jean O’Callaghan the hospital board announced a u-turn and said that they were successfully making savings through natural staff wastage. The board are still confident that savings will be made and are working hard to cut costs in every department.