- The trust was set a financial control total of £8.6m deficit for 2016-17
- £10m deterioration in December due to expected income from commissioners not being realised, as well as unexpected charges
- A major centralisation of acute services has reduced the number of beds at the trust, but failed to reduce demand on emergency services
East and North Hertfordshire Trust has reported a steep deterioration in its finances and is now forecast to end the financial year with a £28m deficit.
The trust was set a financial control total of a £8.6m deficit by NHS Improvement for 2016-17, and the regulator’s official provider sector report in November said it was projected to meet this.
According to the trust’s January board papers, there was a £10m deterioration in December due to expected income from commissioners not being realised, as well as unexpected charges.
In a memo sent to staff this week, seen by HSJ, the trust said that rising demand for services has been a significant driver of the deficit.
A major centralisation of services at the Lister Hospital in Stevenage has reduced the number of beds at the trust, but failed to reduce demand on emergency services.
Trust chief executive Nick Carver wrote: “The new services and facilities put in place at the Lister and New QEII hospitals were based on detailed patient activity plans made by our local commissioners that saw emergency and planned activity falling as more patients were treated in community settings.
“With a few months left in 2016-17, demand for our services has actually risen substantially, driving the need for additional, unplanned capacity at a higher cost.”
The memo added that consultants will be brought in to help the trust “get greater grip on our finances”.
The board papers said £4.5m of the deterioration in December was due to repayment of “2014-15 brokerage”. This relates to bridging finance previously received from commissioners that the trust did not expect to repay.
Almost £3m relates to income the trust was planning to receive in relation to changes in clinical coding, at a cost to its clinical commissioning groups. A mediation process decided the trust will not be able to implement these changes until 2017-18.
Meanwhile, the trust was also planning for £2m of additional support from commissioners that did not materialise. It is now set to miss out on £5.5m of sustainability and transformation funding due to missing its financial target.
Mr Carver told HSJ that external support is needed to “bring in additional skills and also up-skill some of our existing people”.
He also pointed out that £17m of the adverse variance will be non-recurrent.
Trust board papers and staff memo