FINANCE: Ashford and St Peter’s has set itself a target of ending 2011-12 with a surplus of a £2.1m.

Board papers for April state the trust “was close to signing” heads of terms with NHS Surrey in respect of 2011-12.

“This reflected the board’s agreement to a reduction in the target surplus by circa £1m. The revised budget would achieve a surplus of £2.1m and an FRR [Monitor financial risk rating] of three (rounded from 3.3), the papers said.

They added: “The contract represented a reduction of income compared with 2010-11 of circa £5m and would therefore represent a challenging year financially.”

The papers noted that the financial position at the end of 2010-11 showed a “surplus of £3.3m as planned, and EBITDA (earnings before interest, taxes, depreciation, and amortization) of £16.7m”, which was £1.9m lower than plan, but in line with forecast.

The report also said the capital programme was £1.8m under-spent for the year 2010-11, and a review would be undertaken to potentially allow some of the projects that were not undertaken this year to be fulfilled in 2011-12.

The report said the trust had missed the EBITDA target “due to additional non-elective work over the winter period leading to the opening of unfunded beds” and that it would need to “strengthen” its management of EBITDA during 2011-12.

It added that the trust had healthy cash balances of £18.7m at year end, some of which related to the £1.8m capital spend undershoot.