• Barts Health Trust posted deficit of £145m against original control total of £85m
  • Regulators agreed to relax the target and allow trust to access STF
  • Decision comes after delays to an expected land sale

A large acute trust in London has missed its original financial target for last year by £60m, but has still been awarded most of its sustainability and transformation funding.

At the start of 2017-18, Barts Health Trust signed up to a control total deficit of £85m, which would trigger STF payments of £39m if met.

Barts Health NHS Trust

The trust missed out on some STF money due to missed A&E targets

But operational pressures and delays to an expected land sale meant the trust ended the year £145m in the red.

However, NHS Improvement agreed to relax the trust’s control total, allowing it to access its STF allocation.

In a statement, the trust said the revision reflected a timing delay on a land sale that had been expected to deliver a £60m “profit” and enable the control total to be met.

It said the change recognised the trust “achieved its operational budget for the year”.

HSJ questioned this statement, as the trust’s year-end finance report said “site and directorate budgets ended the year £78.4m adverse against plan”, while the revised control total was achieved with significant support from non-recurrent items such as the use of £14m from reserves.

At the start of the year, Barts had planned to make only a £30m profit on land sales, the benefit of which was factored into its original £85m control total plan.

But over the course of the year, the trust experienced £15m of extra costs from winter and other operational pressures, along with £15m of adverse impact from the WannaCry cyberattack.

To try to offset these pressures mid-year, the trust identified opportunities to increase its land sale profits to £60m. However, the sale was not completed in time, which led to the shortfall against the original control total and the subsequent revision.

When an expected land sale by the Royal Free London Foundation Trust did not complete in time for the 2016-17 accounts, NHSI did not revise its control total and the trust missed out on STF payments.

NHSI was asked why it agreed to revise Barts’ control total by £60m, rather than £30m (the expected land sale profit in the trust’s original plan), but it has not responded.

A Barts spokesman said: “The revision of the control total is because of the specific circumstances of the prospective sale, not because of the operational pressures…

“For reasons beyond our control, [the land sale] didn’t materialise within the financial year. However, because we did what NHSI asked of us, and were on track to meet the £85m deficit target until almost the last minute, NHSI revised the control total so we could still qualify for the substantive STF.”

The trust has been awarded at least £36m of STF for 2017-18, with the £3m shortfall relating to missed accident and emergency targets.

The land sale, which the trust said it cannot provide details of due to commercial confidentiality, is expected to be completed in early 2018-19. It is not clear whether the profit will count towards the trust’s control total performance for this year, which would effectively mean the trust gains twice from the benefit.

NHSI has agreed to revise the control total for South West London and St George’s Mental Health Trust by £16m, which also relates to a delayed land sale. However, this reflects the profit that was expected and planned for by the trust at the start of the year.

Trust misses finance target by £60m but keeps access to STF