FINANCE: The foundation trust’s liquidity is forecast to come under “significant pressure” in the third quarter of 2012-13 and it “may require additional funding”, Monitor warned on 2 August.
The regulator today moved to intervene at Bolton Foundation Trust, after the trust saw a “significant decline” in its financial performance and revised its annual plan to forecast “significant deficits” for the next three years.
Monitor’s letter outlining its reasons for taking regulatory action noted that Bolton may need additional funding to plug a cash shortfall later this year.
“We are concerned that the Trust’s liquidity position is forecast to come under significant pressure in Q3 2012,” it stated. “The Trust has limited mitigations in place in respect of this issue and may require additional funding.”
It noted: “The Trust is currently experiencing significant net cash outflows and consequently the Trust’s liquidity position is forecast to come under significant pressure in Q3 2012, in spite of a cash advance from the [Strategic Health Authority].
“The Trust is unable to explain why it is operating at a loss and has not been able to provide a meaningful analysis of the adverse variances in performance.”
It added: “It is likely that the Trust will need to draw on its Working Capital Facility, however the Trust’s lender is yet to confirm that the current facility would be available. In any event, the Trust’s Working Capital Facility is due for renewal in September 2012 and the Trust’s lender (RBS) is yet to commit to renewal of the facility.”
Read HSJ’s full report on the regulatory action here.
2 August 2012