Royal Free is latest hospital forced to make job cuts

One of the country's leading teaching hospitals announced it was cutting hundreds of jobs yesterday in a further sign of the NHS's worsening financial crisis.

The Royal Free Hospital in Hampstead, north London, said about 480 posts will be lost under plans to achieve savings of £25m in the next year. In Sidcup, Kent, Queen Mary's Hospital warned that 190 staff may be axed to reduce a predicted £13m deficit. The total includes 103 nursing and midwifery posts.

The announcements on Budget Day drew accusations that the hospitals were trying to bury bad news. They bring to five the number of hospitals to have declared jobs cuts this week as NHS trusts struggle to balance their books.

The NHS was forecasting a record overall deficit of £790m at the end of January and the one in four trusts that have overspent have been told they must clear their debts in the next financial year.

Yesterday it was announced that 300 jobs were to be cut at New Cross Hospital, in Wolverhampton, West Midlands - an attempt to rein in debt expected to top £38m. On Monday, Plymouth Hospitals NHS Trust said it was cutting about 200 jobs to help save £22m.

Last week hospital bosses in Staffordshire revealed that up to 1,000 staff could be made redundant in Stoke-on-Trent to reduce a £15m debt. Some 750 redundancies at the University Hospital of North Staffordshire could be compulsory.

The Royal Free Hospital NHS Trust said it had to save 7 per cent of its annual turnover and had drawn up a cost improvement plan to achieve the savings.

The £25m was made up of the legal requirement to repay millions of pounds of overspending, the need to achieve a Government target of a 2.5 per cent efficiency savings, which amounted to £9m, and £10m to cover increased salaries and cost of drugs and equipment. The Trust said it expected to end the current financial year with a deficit of £5.2m.

Andrew Way, the chief executive, said: "We must achieve financial balance if we are to control our own future as the Government has made it very clear they will not bail out organisations which fail to do so."

Geoff Martin, London Health Emergency's head of campaigns, said: "The Royal Free have tried to smuggle this news out on Budget day but it certainly helps explain why Gordon Brown body-swerved the NHS question in his speech. Sacking nurses never looks good for the Government."