• University Hospitals of Derby and Burton Foundation Trust was in line for a bumper payment from the national “provider sustainability fund”
  • FT expected to significantly surpass its 2018-19 financial target thanks to a major asset sale
  • But this has been scuppered by a “late audit adjustment” and £60m has instead been distributed to others 

An NHS trust that was expecting receive around £60m of national incentive funding has instead seen the money distributed to dozens of other providers.

University Hospitals of Derby and Burton Foundation Trust was in line for a bumper payment from the national “provider sustainability fund”, as it expected to significantly surpass its 2018-19 financial target thanks to a major asset sale.

But NHS Improvement’s year-end performance report said the trust’s accounts were subject to a “late audit adjustment” which resulted in the “reversal of an accounting treatment used to record an asset sale”. The trust’s external auditors are PwC.

The report said the asset sale was worth £101m, although it is unclear whether this was the actual sale price, or the book value of the asset. The trust has declined to identify the asset, or comment on the adjustment, until its annual accounts are published. 

The late adjustment will be a significant blow to UHDB, as rule changes from NHSI mean 2018-19 was the last year in which the proceeds of asset sales could be used to boost “control total” performance and trigger additional PSF.

Around 135 trusts have received a share of the £60m, which appears to have been allocated according to control total performance and turnover. Payments range from £101,000 for Lancashire Care FT, to £1.1m for Newcastle Upon Tyne Hospitals FT.

Trusts which had not submitted final accounts at the time of the report being drafted were not eligible for redistribution, and NHSI said there was also a floor of £100,000 “to minimise the number of providers impacted”

The NHSI report says: “There was a late audit adjustment in the accounts of University Hospitals of Derby and Burton Foundation Trust resulting in the reversal of the accounting treatment used to record an asset sale of £101m.

“This has resulted in the redistribution of a PSF allocation that had been previously earmarked for that trust.

“We have always committed to fully distributing the PSF and, given the late timing of this adjustment, the redistribution needed to be transacted as a post accounts adjustment.”

Kevin Downs, executive director of finance and performance at UHDB, said: “We are still finalising our annual accounts with the trust’s auditors and cannot comment further.

“A detailed note on this matter is included in our annual accounts to be published in July.”

The accounting treatment has contributed to the trust reporting a huge deterioration against its financial plan for the year, with a deficit of £69m against its pre-PSF control total deficit of £37m.

It was therefore listed among NHSI’s worst performers for the year.

worst