HOSPITAL bosses in Basingstoke are having to save £5.7million this year despite receiving the biggest boost in NHS cash for years.

Altogether, £14million has to be saved in the next three years - even though the Government's NHS plan demands doctors and nurses speed up waiting times and hit new standards of quality.

Basingstoke hospital's director of finance Chris Ellarby told a meeting of directors that only 1.5 per cent of the hospital's nine per cent increase in NHS cash this year will be spent on hitting the new targets.

He said the requirement to balance the books, hit targets and find savings "will be very tough and challenging".

This year the hospital's income will be £96million, which includes a nine per cent increase in Government cash.

Director of planning Martyn Dell told The Gazette the hospital had a good record in protecting patient services while making savings, and last year saved more than £4million while successfully hitting new targets.

He said: "We have always worked very hard to minimise the impact on patients. We have not introduced any cuts that I'm aware of and have no plans to do so. It is a lot of money to save, but there is also a lot of money coming in. Any business is going through this process."

Mr Dell added: "It is going to be a difficult but exciting year. This is the first time we have known what we are going to be doing over three years, instead of one. That is a good thing."

Mr Ellarby hopes there will not be a slowing-down of major projects like the £7million renovation of the worn-out maternity building, which should be revamped this year.

He added: "I don't envisage that happening, but never say never."

Mr Ellarby said £5.3million of the three-year savings plan would be of a one-off nature. In his financial plan, Mr Ellarby said that, so far, £3.3million has been identified from the £5.7million savings required for 2003-4.

His plan outlines how: - more than £1million will be brought in by using the temporary eye unit to perform work on patients from other areas

- £457,000 will be "saved" by changing the way treatment is funded for haemophilia patients

- £500,000 will be saved through "unspecified initiatives"

- £400,000 will be saved by increasing recruitment to cut out expensive agency staff

- £250,000 will be saved by improving procurement of materials with the local Supplies Confederation

- £110,000 will be saved from cuts already approved through which fewer orthodontic patients are treated.

The rest of the money is to be derived from a "Modernisation and Recovery Plan" in which the hospital staff are expected to change the way they work with and treat patients.

Mr Ellarby said: "When we talk about this, we mean doing more for the same money."

Hospital chief executive Mary Edwards said a team headed by Jill Pellett, a hospital director, will come up with good ideas for this programme in the next two months.

The work will be conducted in partnership with North Hampshire Primary Care Trust, whose staff will publish their own financial plan in the next few days.

Mr Ellarby's report states that managers are faced with many pressures, including having to wipe out long-running overspends in the Hampshire NHS and paying for newly-approved drugs.

He said a high-powered recruitment drive had been successful in recruiting nurses to Basingstoke, but warned: "We have got to get even more recruits."

He added that the budgets being set for each department of the hospital would be "challenging but realistic" in order to enlist the full support of staff.