GETTING OUT: Ken Whelan has resigned as chief executive for the Capital & Coast District Health Board.

Wellington's district health board chief has quit, saying he cannot cut costs any further without undermining patient care.

Ken Whelan announced his resignation yesterday as chief executive of Capital & Coast District Health Board, which he has led since April 2008.

In a public statement, he said only that he had enjoyed his time in the role and was now taking "a much-needed break" before pursuing other opportunities.

However, in an email to staff explaining his reasons for leaving his $430,000-a-year job, he said there was no more room to cut the district health board's costs, despite Government pressure to do so. "I cannot see where any more major efficiency can come from without negatively impacting on services."

Board members, including chairman Sir John Anderson, backed his statements, saying any further savings would "cut into muscle".

District health boards have been under pressure from the Government to cut costs. Capital & Coast has come under particular scrutiny, after years of large deficits and budget blowouts.

The board finished the latest financial year on budget but with a $47.5 million deficit, much of it the result of costs associated with the new regional hospital, which was completed last year.

Earlier this year the board unveiled a plan to cut $27m from its budget.

Mr Whelan would not comment any further yesterday about why he was resigning.

Sir John said he had accepted Mr Whelan's resignation with regret and agreed with his assessment that there was little room for further cost-cutting. "If you cut into muscle you are going to affect services."

The organisation had been "a complete and utter shambles" before Mr Whelan arrived, he said.

Mr Whelan was appointed to replace chief executive Margot Mains, who resigned in December 2007 after political fallout over the board's deficit, clinical service crises and tensions between management and clinical staff.

He oversaw the completion of the new regional hospital – a $377m project that Sir John described in March as a financial "albatross".

Mr Whelan's comments were also backed by board members Donald Urquhart-Hay and Ruth Gotlieb.

Mrs Gotlieb said Mr Whelan had "worked like a dog for the last two years cutting expenditure back, cutting the budget deficit and he's reached the Plimsoll Line. He feels that he can't cut any more".

Mr Urquhart-Hay said Mr Whelan's resignation should serve as a warning to the Government that it had pushed district health boards too far.

"There must be an appreciation of the problems that DHBs face, and in particular our DHB, of the increasing demands that the health service is facing."

The board had worked hard to live within its means in recent years under Mr Whelan's "first-class" leadership, but it faced big financial problems.

Health Minister Tony Ryall refused to comment on Mr Whelan's email or talk to The Dominion Post yesterday. Through a spokesman, he said Mr Whelan had done "a good job and made a real difference".

NUMBER CRUNCHING

Capital & Coast DHB ended the financial year on June 30 with a $47.5 million deficit, $180,000 better than budgeted.

$37.5m of that was interest, depreciation and charges related to the new Wellington Hospital.

The board expected its operational budget to break even by the end of the next financial year, but regional hospital costs would mean an overall deficit of $40m.

The board will cut $10m from primary health and $17m from hospital services this year and next year to help meet its budget.

BOARD REACTION

Sir John Anderson (chairman): Agreed that there was no more room to make cuts. "If you cut into muscle you are going to affect services."

Donald Urquhart-Hay: Sympathised with Mr Whelan and said he agreed with his sentiments.

Keith Hindle: Said Mr Whelan's job was "one of the toughest jobs in Wellington". Board members were "stunned" by his departure.

Judith Aitken: Would not comment on Mr Whelan's email, but was disappointed he was leaving.

Ruth Gotlieb: "He's worked like a dog for the past two years, cutting expenditure back, cutting the budget deficit and he's reached the plimsoll line."

Debbie Chin, Peter Roberts, Helene Ritchie and Margaret Faulkner did not want to comment.

Virginia Hope, Peter Douglas and Selwyn Katene did not return calls.

Sir John Anderson, Peter Douglas, Selwyn Katene, Keith Hindle and Debbie Chin are government appointees. The others are elected.