FINANCE: Dorset County Hospital is on track to beat its cost improvement plan target for 2010-11 – but has admitted that most of its savings for the year are “non recurrent”.
The hospital’s operational report for January, presented to the board on March 1, showed that the trust is heading for an end-of-year deficit of £3.1m – better than the planned £3.5m.
The report showed that the trust was £2.7m in the red in the year to the end of January, against a planned deficit of £4.04m.
The trust’s savings plan is overperforming, the paper showed, but this was “driven by non recurring savings of £2.7m on vacancy management… the non-recurrent nature of these savings is a concern”.
Staffing costs rose in January to £128,000, despite the month seeing only a marginal increase in the number of whole time equivalent hours worked. The report put this down to back pay for doctors moving onto new contracts, bank holiday pay arrears and an increase in agency spend, but noted that this sum was offset by lower than expected non pay costs.
“The current holding of vacancies is not sustainable though as a recurrent recovery plan and fortuitous savings must be identified recurrently for removal from budgets in 2011-12,” the report stated.
One “key concern” the organisation identified was an underlying cash liquidity problem, describing the situation as “unsustainable in the long term”.
The trust has approached the Foundation Trust Financing Facility for a term loan against two years of its capital programme, and a bridging long against expected income from asset sales.
A further £1.3m “resource and cash variation” has been agreed with NHS Dorset, securing income for fines, penalties, non payment by results income and overperformance.