RUNNING Oxfordshire's largest hospital trust is like managing Tesco, and staff cuts will be made if 'business' falls, according to Chris Hurst, the Oxford Radcliffe Hospitals NHS Trust finance director.

He said new business-like principles meant that, just like a supermarket, his organisation could never guarantee how much money it would make in a year.

As a result, managers had contingency plans in place to ensure they kept afloat during financial black spots - leading to a reduction in beds and workers.

In recent years, under a system called Payment by Results (PbR), hospitals have been paid by Primary Care Trusts for every patient they cared for.

But PCTs were constantly searching for alternative ways to treat patients in the community to save their own budget from expensive hospital bills.

Mr Hurst said: "It's a bit like being Tesco. Because of PbR we don't know exactly how much business we're going to get every year, so we have a contingency to manage that."

He was speaking after ORH board members was told the trust would still produce a forecast £7m surplus by the end of the financial year, next March, as long as the number of patients admitted for care did not fall.

He added: "If Oxfordshire PCT treated more people outside our hospitals, or they managed to reduce the number of patients coming to us in other ways, we wouldn't need as many beds.

"So at the beginning of the year our divisional directors planned how they would respond to that - and that does mean a reduction in capacity and staff.

"However, this does not mean redundancies.

"At any point in time we have a number of vacancies and temporary staff and we would just manage this to reduce capacity."

Although Mr Hurst told board members the trust was still on track to reach its budgeted surplus, it only made a £1m surplus in the first four months of 2007/8 - compared to a targeted £3.4m.

Members of the Oxfordshire branch of Keep Our NHS Public criticised Mr Hurst's supermarket analogy and claimed it showed how market forces were taking over the health service.

Secretary Helen Groom said: "The current Government policy enshrines the belief that marketisation of the health service will produce better health care, but this is a perfect example of why the NHS can't be run like a business. People aren't a commodity like car parts."

Mark Ladbrooke, chairman of Oxfordshire Unison's health group, added: "The NHS shouldn't be running at a surplus. We don't pay taxes for the NHS to save money and it's a very worrying situation."