Large trust’s financial slide puts £26m funding in jeopardy

East Suffolk and North Essex Foundation Trust’s finance committee said that, as of July, the provider’s 2019-20 financial position was forecast to be £25m worse than its £8.5m control total. This equates to a £33.5m deficit for the financial year.

The trust told HSJ this week it had “improved the forecast variance to control total of £11m”, giving it a forecast deficit of £19.5m. It said it was “seeking to improve on this position and is working with partners in the system in order to meet its control total at year end”.

The minutes of the trust’s July finance committee, published in papers for its last full board meeting in August, said: “The consequence of not recovering by the end of the financial year will also be the loss of [provider sustainability funding] and [financial recovery funding] of £26.2m.

It added: “During June, the trust reported a deficit of £13.1m. This was adverse to plan by £9.6m and adverse to budget by £9.8m. The cumulative position is a deficit of £18.0m, which is adverse to plan by £10.5m and adverse to budget by £13.2m.

“Based on the current behaviours and actions the trust is predicting a £25m variance to the plan.”

The report said drivers of the variation for the quarter include a shortfall on specialist income (£1.9m), significant overspending on junior medical staffing (£1.7m), and under delivery of its cost improvement programme (£4.5m).

The trust formed after the merger of Ipswich and Colchester hospitals in July 2018 and is now the largest acute provider by patient volumes in the East of England. It had 201,747 emergency attendances in 2018-19.

The trust is planning a major clinical reconfiguration of services, which includes walk-in patients only being able to access the trust’s two emergency departments if they get a referral from a colocated urgent treatment centre.

The trust’s chief executive Nick Hulme told HSJ the trust forecast it could cut emergency department activity by 50 per cent as a result of the changes.

The trust has also set out controversial plans to build a new £30m orthopaedic centre at one of the sites. The move has led to local MPs, including home secretary Priti Patel, lobbying on behalf of their local hospitals.

Mr Hulme said no decisions would be made until after a formal consultation later in the year. The centre would not be opened for around another four years.

Roughly 750 patients a year would be affected, although the chief executive stressed patients would return to their local hospital for outpatient and follow-up appointments and they would only need to go to the specialist centre for major procedures.