Health trusts suffer more money woes

SUFFOLK'S financially-troubled health trusts are facing a multi-million pound penalty for failing to clear their debts, it has emerged.Primary care trusts (PCTs) in the county are expecting to have a combined deficit of up to £50million at the end of this financial year.

SUFFOLK'S financially-troubled health trusts are facing a multi-million pound penalty for failing to clear their debts, it has emerged.

Primary care trusts (PCTs) in the county are expecting to have a combined deficit of up to £50million at the end of this financial year.

And because they will not be able to wipe off the debt, which is largely inherited from previous years, by the deadline of March 31, they are now heading for a £5m charge.

The 10% penalty comes as interest on money borrowed from the NHS to cover the amount they are in the red – even though trusts have made “excellent progress” on balancing this year's accounts.


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The move has been criticised as “counter-productive” and attacked as taking money away from patient care.

Suffolk East PCTs, including Ipswich Hospital NHS Trust, projects it will have a total debt of £24m by the end of this financial year.

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Suffolk West PCT has a projected deficit of £13.3m while West Suffolk Hospital NHS Trust's is expected to be £11.4m. Waveney PCT also has a debt of £1.75m.

David Ruffley, Conservative MP for Bury St Edmunds, has now tabled a series of Parliamentary questions to the Health Secretary, Patricia Hewitt, on the issue.

Mr Ruffley said: “The only people that will suffer through these penalties are the patients themselves. It seems frankly ludicrous that the people of Suffolk, who already face cutbacks to health services across the region, could be punished further because of the financial mismanagement within our health trusts.

“This is money that would otherwise be spent on patient care and it seems counterproductive, to say the least, to fine health trusts who are already struggling to meet the needs of their patients.”

Jan Rowsell, spokeswoman for Suffolk East PCTs, said: “We are making excellent progress on tackling our financial challenges and you can see this in the fact that in the year 2005-6 our overspend – the gap between what we spend and what we had – is just £2.1m. If you think that we were actually predicting an £18.4m overspend this year you can see the progress.”

A spokesman for Suffolk West PCT said: “Our financial recovery plan will deliver £9.1m of savings, which in a period of eight months is unquestionably progress. Clearly next year, 2006-7, more needs to be done but that is a considerable achievement.”

A spokesman for West Suffolk Hospital added it had saved £6.4m on its debt.

A Department of Health spokesperson explained the 10% was not a “fine” but part of the normal financial management process, a system that applies to all NHS organisations.

“Where an organisation underspends in one year, they receive the money back in the following year. For the system to balance, this means that an organisation that overspends must similarly pay the money back in the following year,” she said.

“As part of the financial planning process for 2005-6 the policy of adding interest to the repayment of all overspending and underspending was developed, to provide an additional incentive to improve financial management and deliver financial balance.”

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