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Last Updated: Friday, 27 January 2006, 06:32 GMT
Midlands faces an NHS debt crisis
The NHS in the West Midlands is likely to have amassed debts of more than 100m by April, a BBC survey reveals.

The finance director of Shrewsbury and Telford Hospitals NHS Trust resigned when the trust slipped 19m into the red for the financial year 2004/05.

He was criticised by the Strategic Health Authority (SHA) for allowing a culture of "financial fantasy".

This added to the 10m debt predicted for the year 2005/06 has resulted in the trust facing a 29m deficit.

The NHS across Shropshire alone is 55m in debt and proposals have been put forward to close three community hospitals in Ludlow, Bridgnorth and Whitchurch.

Organisations like mine have problems
Tom Taylor, chief executive of Shrewsbury and Telford Hospitals NHS Trust

Thousands of people joined marches in the county earlier this month to protest against the closures.

Tom Taylor, who was appointed chief executive of the trust in August, a number of measures had been put in place to try to recoup some of the money including putting a freeze on recruitment, and losing nearly 300 posts over the next two years - preferably through voluntary redundancies.

A review of the management and clinical structure is also under way.

Mr Taylor told BBC News: "The government has put money into the NHS but the new pay bill and pensions is where just under 60% of the money has gone. Organisations like mine have problems.

"If we can get back into financial balance next year then we would only have two years to pay off the historic debt so we have asked Patricia Hewitt for more time to pay this off and she has agreed to consider it."

Elsewhere in the region the financial health of the NHS does not look to be improving.

Financial hole

The chairman of the University Hospital of North Staffordshire NHS Trust, Calum Paton, and four non-executive directors were forced to resign two days before Christmas after it was revealed that two sets of auditors failed to pick up on an 18m overspend.

Mr Paton blamed changes in national policy, Private Finance Initiatives and new pay schemes for staff for the financial hole.

In a statement Mr Paton said that a "robust and radical" service and cost-recovery strategy was being implemented.

This included a recruitment freeze which has led to medical students having to wait weeks to find out if they have been given posts.

Cost-cutting scheme

About 50 newly-trained nurses at Keele University also had their job interviews postponed at the University Hospital of North Staffordshire.

The trust's finances are expected to be affected for the next three years.

Royal Wolverhampton Hospitals NHS Trust has also built up big debts of 10m, which is 1.3m more than they predicted at the start of the financial year.

Plans to close the Wolverhampton Eye Hospital as part of a cost-cutting scheme at the city's New Cross Hospital sparked protests from staff who walked out in November.

Managers said they had no choice but to shut the existing building as it was riddled with asbestos and they could not guarantee the safety of patients.

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