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Media Statement on Trust financial position

The RD&E is projected to make a £2.7m deficit by the end of the financial year – equivalent to less than 1% of its total income.


Demand for services at the RD&E continues to rise, particularly amongst patients of the older age group, many of whom have complex multiple needs that require high levels of specialist medical and nursing care. Since the £20 billion cost reduction efficiency programme was introduced into the NHS the RD&E has generated over £50m of recurrent savings over the last four years.  


Each year for the last four years the individual price the RD&E receives to treat patients has been reduced by 4%. Put simply, this means that to treat the same number of patients we treated last year we receive approximately £11million less income each year. In addition, for emergency patients admitted to the RD&E, the Trust receives a reduced price of 30% of the agreed cost treating these patients, for all emergency patients above a threshold set in 2009. In the current financial year the impact of this is approximately £6million.

Finding savings of this magnitude year on year is a major challenge and is becoming increasingly hard to achieve and this year for the first time the Trust has not been able to achieve the required level of saving.


Work is continuing to identify ways of further reducing cost including:


Angela Pedder, RD&E Chief Executive, said: “The environment within which the NHS is operating is very challenging and whilst it is very disappointing not to achieve our financial plan this year and to end the year with a deficit, this has to be viewed against our need to balance the delivery of safe care for our patients with a sustainable financial position.


“We have had a very successful track record of doing this and due to our financial prudence in earlier years we will maintain the highest financial rating with our regulator despite the in-year deficit.   The Board is committed to finding a solution but our prospects for the next few years in light of the further reduction in our income that is forecast are very much more difficult than we have faced for many years.


“We know from looking at the national benchmark data the RD&E is very cost efficient as well as being clinically safe and effective. We will continue to work hard to reduce our current deficit and return to making a surplus as in previous years, but this is going to be a considerable challenge if we have to continue making the same level of efficiency savings each year whilst managing increasing demand.


“The Trust welcomes the announcement that NEW Devon CCG has been recognised as a financially challenged locality and the wider health community will be receiving external support to help develop a sustainable strategy for the provision of services and look forward to working with them on the project.”

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