Feature

Saving jobs, saving lives

Health service cuts don’t just affect patients — they damage the health of whole communities. Frank Chalmers reports on unique research into the wider context of cutbacks

When factories, mines or shipyards sack thousands of workers, the media fallout can occupy headline space for weeks. But with hospital cutbacks, it seems somehow different.

The threat to thousands of jobs at the Royal Hospitals Trust in Belfast is a case in point. The Royal is Belfast’s biggest general hospital and Northern Ireland’s second largest employer, but as it struggles to survive on a financial life-support machine, talk is of throughput and efficiency-savings rather than jobs and communities.

Towards the end of 1993 the Eastern Health Board in Northern Ireland declared an intention to reduce acute care in its hospitals by 40 per cent by the year 2002. Statements earlier in the year on the need to end ‘duplication’ in the provision of 14 specialties left no-one in any doubt that the Royal would be the main target of the board’s cuts.

The silence in the British media was deafening. But the Royal doesn’t build cars or construct ships — it only rebuilds people, people often, literally, blown to bits because of the Troubles. And as the Eastern Health Board pulls out the financial drips the government hopes nobody will notice.

Public sector union Unison, which continues to spearhead the campaign to save health services in Northern Ireland, commissioned researcher Dexter Whitfield from the Centre for Public Services to undertake a social and economic audit of the Royal Hospitals Trust. His conclusions on the potential impact of losing the 14 specialties should be compulsory reading in all communities with a general hospital.

At the time of the study the Royal provided 4,273 jobs for women and 1,297 for men - a total of 5,570. It was estimated that the removal of the 14 specialties would mean a potential loss of 1,500 medical, nursing and medical-record jobs - 52 per cent of the hospital’s medical and nursing staff.

By assuming similar percentage loss in jobs in support and site services, but a lower (40 per cent) drop in maintenance, finance, pharmacy, central sterile services and laboratory posts, it was calculated that another 1,220 jobs would disappear in support and site services. Over three-quarters of jobs lost (2,115) would be those of women.

With staff having a net total take-home pay of about £53m annually, primarily spent on housing, goods and services, such job losses would undoubtedly have a significant impact on the local economy - but how much?

Whitfield first calculated levels of gross pay, then made deductions for tax and national insurance, and money that would normally be diverted into personal savings. Next he took account of the propensity to spend on ‘importing’ goods into the area, and deducted the equivalent spending power that would be replaced by unemployment benefit. His conclusion was that £15.92m of staff wages contributed directly to the local economy.

Once estimates were made of how this contributed to wages and profits in the local retailing and distribution sector, he was able to conclude that each job lost would have a ‘multiplier effect’ on the local economy of 1.24. In other words, ‘for every four hospital jobs that are lost, one additional job will be lost in the Belfast economy because of reduced spending’.

By drawing on postal codes for staff addresses he found that 1,015 of the job losers would be people living in the constituency in which the hospital is situated, West Belfast. Using the multiplier on this figure would take the total to 1,260. But, as it could be assumed that a quarter of those additional losses would be in other parts of the city - because residents also shop and purchase goods in the city centre - the total potential job loss in West Belfast was calculated to be 1,200.

Women’s employment would be substantially affected, accounting for 73.3 per cent of the job losses on a city-wide basis — but, because of the higher proportion of women in nursing and support services who lived in West Belfast, 83 per cent of local job losses. The unavoidable conclusion was that unemployment in West Belfast - nearly 50 per cent in some wards - would, with the additional loss of 1,200 local jobs, increase by 13 per cent.

But the most staggering finding of the research was that the public cost of unemployment would actually be higher than the cost of paying wages to keep people in the hospital jobs (see table). The annual cost of unemployment was £10,740 per claimant, while the average wage at the Royal was £10,708 (December 1992).

Whitfield’s conclusions make disturbing reading. In terms of public spending they show that in such circumstances there is no such thing as a ‘saving’. The health authorities and the trusts, in this case the Royal, can claim a saving, which may be important if the government has plans for the future privatisation of trusts. But the public, through other government departments, bears the brunt of such ‘savings’ by taking on the burden of additional costs.

As Whitfield told healthmatters: ‘A hospital is not some health island operating in a city or region. It interacts with businesses — and communities’.

The Centre for Public Services can be contacted at 1 Sidney Street, Sheffield S1 4RG. Tel: 0742 726683.