- Barking, Havering and Redbridge University Hospitals Trust requests around £100m of cash support for 2018-19
- The loans from the Department of Health and Social Care will attract an interest rate of 6 per cent
- Monthly run rate deficit must reduce by £2m for trust to hit financial plan
A financially troubled acute trust has requested around £100m of cash support to maintain its operations in 2018-19.
According to Barking, Havering and Redbridge University Hospitals Trust’s finance report for September, the loans from the Department of Health and Social Care will attract an interest rate of 6 per cent.
The report said the cash would support an in year deficit plan of £53m, the loss of a dispute with commissioners worth £13m, and the repayment of a previous loan of £28m. The trust’s turnover in 2017-18 was £570m.
The trust is already in financial special measures after a large cash shortfall emerged in October 2017, and subsequent investigations which revealed multiple governance failings.
The trust rejected its NHS Improvement control total for the current financial year, instead setting a larger deficit plan of £53m. In the first four months of the year, it reported an average monthly deficit of £6m, which needs to reduce to £3.8m for the plan to be met.
Its cost improvement plan is heavily backloaded to the final months, which the finance report said “increases the risk of non-delivery in the event that individual schemes prove unachievable”.
The trust missed its financial plan by around £50m in 2017-18, of which £12m related to missed payments from the “sustainability and transformation fund”.
One of the issues identified by external investigators was that the trust had routinely delayed invoice payments, which in some cases led suppliers to cease deliveries or threaten legal action.
Over the last few months, the trust has dramatically improved its payment performance, paying more than 90 per cent of invoices within the statutory 30 days, compared to just 26 per cent in 2016-17.
The fact the trust is in financial special measures means it is charged the highest possible rate of interest on cash support from the DHSC. NHSI has suggested there will be changes to this “punitive” approach.
Trust board papers
5 September 2018