FINANCE: The east London organisation lost an arbitration case brought against commissioners, the Outer North East London cluster.

BHRUT believes it is the only acute in the country to have a block contract arrangement with commissioners for high cost and chemotherapy drugs - a situation it went to arbitration with NHS London to try and remedy.

BHRUT’s finance director David Wragg said: “The Outer North East London cluster commission high cost and chemotherapy drugs, normally excluded from the Payment by Results tariff, on a block contract basis, with a spend based on 2008/9 outturn. BHRUT is one of the only trusts in London, if not the country, to have a block contract arrangement for these drugs. The value of the block contract has decreased each year, as the commissioners remove a sum equal to the inflationary increase in tariff for PbR from the funding baseline.

“BHRUT believes that by the end of 2009/10, this arrangement was causing us to experience a £5.7m shortfall of income against the cost of the drugs, rising to £6.9m at the end of 2010/11. The block contract arrangement also means that the cost of increased drug usage and higher quality treatments places a further £3.2m potential cost pressure on the Trust.

“BHRUT was not successful in the arbitration meeting convened by NHS London on 8 April. We remain under serious financial challenge, and are projecting that this year there is a financial shortfall of £8.9m in relation to unfunded cancer and high cost drugs.”

ONEL consists of Barking & Dagenham, Waltham Forest, Havering and Redbridge PCTs.