LIVERPOOL'S Alder Hey Children's Hospital will lose £11m in funding in the next 12 months due to controversial new funding plans, senior managers warned last night.

The chairwoman and chief executive at the renowned West Derby centre have called for an urgent meeting with the Government after warning that services to young patients could be slashed under a new payment by results system in NHS

hospitals. They say the hospital stands to lose almost 20% of its income in the area affected by the new funding system, which came into effect this month.

In a letter to health minister and Wavertree MP Jane Kennedy, Alder Hey chairwoman Angela Jones and chief executive Tony Bell said they were "extremely concerned" that cash problems would force them to make cuts to specialist children's services.

They also warned they would face problems in financial planning for the future which could even prevent Alder Hey applying for the extra freedoms of foundation status, which it is entitled to as a three-star rated trust.

Under the new system - a flagship of Tony Blair's health service reforms - NHS trusts will be paid per patient treated.

The Alder Hey letter, jointly written with the heads of Britain's other three leading children's hospitals, revealed that the Liverpool centre will be worst affected by the payment tariffs, which they call "inaccurate and highly insensitive".

Although the figures for next year are not yet finalised, the Royal Liverpool Children's Trust at Alder Hey said it expected to lose £11.03m - or 17.9%% of its income - from payment by results (PBR) in 2006-7.

The letter said: "We are extremely concerned that vital specialist paediatric capacity, particularly in surgical specialities, will be lost at regional and national levels this year, which will lead to public concern.

"The new opportunities presented by choice and through payment by results should be benefiting children and young people, but quite the reverse seems to be the case.

"Our trusts are increasingly the only place of choice for parents whose children need specialist paediatric care."

The Government argues that PBR will allow patients greater choice in where they are treated, by allowing GPs to know how much a given operation will cost. It will also reward hospitals which perform well and attract more patients.

But the trust chairmen who wrote to Ms Kennedy, fellow minister Lord Warner and acting NHS chief executive Sir Ian Carruthers, argue that the system will disadvantage paediatric specialist trusts.

While other hospitals can compensate for any losses by finding savings in marginal areas of activity, this option is not available to children's hospitals, they warned.

Although Alder Hey has achieved the three-star status which allows it to apply for foundation trust status, the letter warns that its concerns over the new financial regime cast doubt on its ability to make that application.

The hospital chiefs called for an urgent meeting with ministers to resolve the issue, which has already been the subject of talks at official level over the past 18 months.

Health minister and Liverpool Wavertree MP Jane Kennedy said last night that, although she had not seen the letter, she would listen carefully to the hospitals' concerns.

She added: "We do take it very seriously when hospitals say to us that they expect to experience difficulties. I have a particular interest in Alder Hey as it has a special place in my heart.

"We are working in a period of unprecedented growth in resources to the health service, which will have risen to £90bn a year by 2008.

"We want to make sure that the way we deliver those resources is as efficient and effective as possible." The other hospitals which have signed the letter are Great Ormond Street, Sheffield Children's Trust and Birmingham Children's Trust.

They say their combined losses are expected to be around £22m in 2006/07 alone.

Liberal Democrat health spokesman Steve Webb said: "The whole process of NHS reform is being conducted at breakneck speed, simply in order to guarantee the Prime Minister a 'legacy' before he goes..

"On present form, the Prime Minister's legacy risks being a decimated NHS, thrown into chaos by over-hasty reform and permanent revolution.

"These children's hospitals do a superb job, yet they are being undermined by the Government.

"It is incredible that hospitals are not being told what they will get for their services until the financial year has started. This makes it impossible to plan ahead with any certainty."

Lib-Dems are urging the Government to introduce PBR over a much longer timeframe in order to ensure that the concerns raised by hospitals are properly addressed.

Work on the £350m rebuilding of Alder Hey is due to start in 2008, with the new hospital taking its first patients in 2013.

Alder Hey had warned it would quit Liverpool if it could not find a suitable site on which to expand, possibly relocating to Widnes.

But a deal was reached late last year when Liverpool council said that it would support its bid to build on adjacent Springfield Park.

alanweston@dailypost.co.uk

Blair insists he will hold his nerve over wide-ranging reforms to the NHS > > >

Blair insists he will hold his nerve over wide-ranging reforms to the NHS

PRIME Minister Tony Blair will today signal his determination to press ahead with controversial reforms of the National Health Service, insisting he will "hold his nerve" in the face of criticism..

Mr Blair will tell an audience of doctors and nurses that the health service has reached a "crunch point" in the 10-year reform programme set out in the Government's NHS Plan of 2000.

While attention had previously been focused on cutting waiting lists, boosting staff numbers and meeting targets on key conditions like cancer and heart disease, the next phase of reform would concentrate on structural change to give power to patients.

Mr Blair will use a speech to the New Health Network thinktank to make clear he will not shy away from the "tough decisions" needed to ensure that the process of transformation is completed.

The challenge is to move to "a radically different type of service, abandoning the old monolithic NHS and replacing it with one devolved and decentralised with far greater power in the hands of the patient", he will say.

In a swipe at critics on the Labour left who have accused him of abandoning the service's founding principles by introducing reforms such as private sector provision of NHS operations, Mr Blair will say that the aim must be to design "a system for 2008, not for 1948". And he will go on to insist that the "general thrust and direction of the present reforms are right" adding: "This is not the moment to back away or dilute these changes, but rather the moment to hold our nerve, back the change-makers in the NHS and see the process of change through."

The Prime Minister will hail the progress achieved in the NHS since Labour came to power in 1997, citing the lowest-ever waiting lists, improvements in the recruitment and retention of staff and reductions in deaths through cancer and cardiac disease.

And he will stress that this progress was made within the framework of care being delivered free.

But he will add: "It is only within the last two to three years that incremental change has given way to what amounts to a revolution in the way the NHS works."