£40 million deficit threat for Grantham hospital trust
The trust which runs Grantham hospital was £12 million in debt just two months into the financial year.
A meeting of the board of the United Lincolnshire Hospitals NHS Trust (ULHT) last week was told the trust was running a deficit of £12.546 million by the end of May and the deficit for that month was £6.255 million.
As a result the trust faces a deficit of more than £40 million by the end of the year. It says it is confident that it can avoid a deficit of as much as £75 million reported previously.
The trust’s director of finance and corporate affairs, David Pratt, said ULHT had lost £23 million in income between the last financial year and the current one. He said it was a “huge loss” which equates to five per cent of turnover.
Mr Pratt admitted the financial situation had given the trust a “very difficult starting position” this year.
One of the main causes for this was the “high emergency activity” the trust had experienced recently. There is an overspend on A&E which has continued through the year. This has meant an additional 72 escalation beds have been opened by the trust to deal with emergency admissions which in turn means there are far fewer beds open for elective surgery.
Mr Pratt said it had cost the trust £600,000 to staff the additional escalation beds.
The trust has to adhere to an annual savings plan, but the board was told it was currently £300,000 behind making those savings.
Mr Pratt said it was increasingly hard to maintain the necessary income when the trust had been forced to make £45 million of savings in the last two years.
He said that income should start to improve once controls on employing agency staff kick in which he said should have been seen by the end of June.
He said: “We continue to search for additional savings.”
The board also heard that pay expenditure for the first two months of the year was £51.166 million which is £3.112 million over budget.
Mr Pratt said: “The overspends resulted mainly from expensive agency cover for vacancies, sickness and staffing additional beds open through the month.”
Trust chairman Ron Buchanan said the figures were “disturbing” and that it was important a properly conceived recovery plan was imposed. He said: “Let’s hope we see a gradual erosion of the deficit into the next quarter so we can get back to the figures we envisaged for the full year.”