- Chief finance officer at Isle of Wight Trust launched financial governance review after KPMG report
- KPMG warned of “significant lack of commercial expertise” at trust last year
- Trust’s underlying deficit forecast to be nearly one fifth of income in 2017-18
- Chiefs say additional finance staff have been recruited since KPMG review
A troubled integrated trust has opened a financial governance review after consultants highlighted an underlying deficit worth more than 15 per cent of the organisation’s income.
Isle of Wight Trust, the only English trust which provides acute, community, mental health, and ambulance services, launched the review after commissioning KPMG in the summer of 2017 to provide “an assessment” of their underlying deficit.
KPMG’s two consultants found the trust, which was placed in special measures in April 2017, was on course for an underlying deficit of £27m for the 2017-18 financial year.
They highlighted a “significant lack of commercial expertise” at the £171m income trust and warned it did not have the “right critical success factors for a successful turnaround”.
Pay and non-pay was “not adequately controlled”, the consultants found.
Their findings were included in the report, which was released to HSJ following an eight month Freedom of Information wrangle resulting in the information commissioner ordering the trust to publish the report.
The KPMG report, which cost £57,500, found that while the trust reported a break even position in 2014-15, its underlying deficit in that year and the following year was £12m.
The underlying deficit rose to £17m in 2016-17, and was forecast to increase another £10m in 2017.
In its report, KPMG recommended the trust “reset” its 2017-18 budget in a bid to reduce the underlying deficit.
The trust told HSJ it ended the 2017-18 year with a £23.2m deficit, but has not yet confirmed its underlying deficit for the year.
However, a spokesman said a “financial governance review” had been launched by Darren Cattel, who was appointed director of finance in July 2017. It is unclear who is conducting the review.
The trust’s previous head of finances was Chris Palmer, whose job title was “executive director of financial and human resources”.
The trust has not yet confirmed to HSJ if the financial governance review has been completed.
KPMG made several recommendations, including:
- holding clinical business units to account for their budget;
- strengthening the capabilities and capacity in the CBUs;
- improving monthly performance management across the trust; and
- providing greater focus on the “timely development and implementation” of cost improvement programmes.
The trust told HSJ it had accepted it did “not have sufficient capacity to deliver the expected financial improvement at the pace required”.
It continues to receive support from KPMG. A spokesman told HSJ the cost of the consultant’s contract would be covered by “additional savings over and above” the £8m savings target for 2018-19.
“The chief financial officer has also recruited additional staff with commercial skills and experience,” the spokesman added.
The trust has planned a deficit of £17m for 2018-19.
Information obtained by HSJ
June 2017 and August 2018