Colchester hospital trust set to borrow funds from government as deficit prediction increased to £21m
The trust running Colchester’s hospitals expects to run up a deficit of just more than £21million this financial year – but has only £25million in the bank.
Dr Lucy Moore, interim chief executive of the Colchester Hospital University Foundation NHS Trust (CHUFT), revealed the state of the finances at a trust Council of Governors meeting today.
It follows a review of CHUFT’s financial position by new interim finance director Andy Morris who took over the post at the beginning of October.
Dr Moore explained the trust had opened initial discussions with watchdog Monitor about borrowing money from the Department of Health.
She said: “For month six our deficit is just more than £13m, that’s the difference between income and expenditure.
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“We have drawn up revised forecast outturn with a range of best, worst and likely position. The current likely forecast is just more than £21m deficit, and Mr Morris has identified a number of risks.
“Our cash position has deteriorated, and we have something like £25m cash in the bank.
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“Overspending at the rate we are that sum is going to dwindle and will have consequences going into the next financial year.
“The current forecast is we will be able to manage our cash this year but next year we will need to find a way of borrowing in order to cover the period going forward.
“My judgement would be this is less to do with escalating costs than a plan which was not fully on top of what we knew was going to happen.”
Dr Moore added the trust’s cost improvement plan to make £8.9m savings was “making progress but we are not doing as well as we need to”.
After six months the trust had saved £2.46m against a target of £3.12m.
But governors pointed out the planned deficit had risen from £8.1m at the start of the year to £15.9m, and now to the new figure of £21m.
Cllr Annie Feltham, stakeholder for Colchester Borough Council, said: “How are the these pressures managed and where are the opportunities? Have we got the diagnosis right so we can either get more money or bring the deficit down, without damaging the quality of the service?
“It is a question of confidence.”
Speaking after the meeting Dr Moore added: “It is not an uncommon situation.”
A spokesman for Monitor said: “CHUFT is a trust suffering from both quality and financial problems. We put it into special measures in November 2013.
“Our priority is making sure the trust is providing quality care to all patients. But we are also clear that this needs to be done on a sustainable basis.
“That’s why we’ve asked the trust to come up with a financial plan to identify what short-term support it needs and what long-term changes need to be made.”
• There was also some good news for the trust at the meeting as Dr Moore revealed the number of attendances had been “quite a lot lower” at Colchester General Hospital’s Accident and Emergency department.
Though the hospital remained in a major internal incident, the situation is being reviewed daily with an area debrief being held on Monday.