Ipswich: Hospital may have to borrow £3m to address soaring debt
Cash-strapped Ipswich Hospital could be forced to take out a loan of up to £3million to help plug a deepening black hole in its finances.
The Heath Road trust is currently £4.6m in debt, only five months into the financial year.
Hospital bosses say if nothing is done the spiralling debt could reach £9m by next March.
Finance chief Paul Scott warned the board of directors at yesterday’s monthly meeting that every effort should be made to avoid having to borrow cash.
He said comprehensive action plans had been put in place to tackle “long-standing” issues.
Offering some reassurance, chief executive Nick Hulme said Ipswich Hospital’s problems were not unique to the trust and all NHS trusts across the country are facing similar challenges.
Mr Scott said: “The cash reserve is below levels I would be comfortable with to pay for supplies and staff. We have just over £1m until March.
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“We are considering taking action to improve the position and we are confident that we can manage but that level of cash remains a risk and we do need to think about requesting a temporary borrowing in the short term, up to £3m if we can’t take appropriate action.
“Ipswich Hospital has struggled in the last two to three years to balance its books and has required support to do so.
“Last year the hospital did not make all the savings and that has been brought forward to this year.”
Mr Scott said every NHS trust in the country has to make a 5% saving each year – a challenge the hospital had struggled to overcome.
He also said the increased pressure on A&E services had further added to the strain.
Hospitals across the country are paid just 30% of the total cost of treating an emergency patient and Mr Hulme said he felt the system would have to change or medium-sized district general hospitals, like Ipswich, would face more severe problems in the future.
He added: “I am confident we are taking the appropriate action and I am optimistic we will get it right but at this stage I don’t have the evidence to show that.”
Another factor contributing to the financial problems has been rising pay costs. But he said action to stem the increase had shown positive results.
Mr Scott said: “Pay costs are higher than they were for the same period last year, and we have the same number of staff.
“We have already put controls in place to tackle issues arising from temporary and agency pay costs and we have seen pay costs reduce.”
A hospital spokeswoman said at this stage there were no plans to look at redundancies to help make cost savings.