Hinchingbrooke Healthcare Trust made a £2.3m loss in the three months to the end of June and may need a cash injection later this financial year if it does not deliver on cost improvement plans.
The trust - the first in the UK to be franchised to a private operator - is now imposing strict controls on vacancies and non-pay expenditure as it tries to get back on track to make cost improvements of £9.9m this year.
A finance report to its board has revealed that it now only expects to deliver £6.5m of the savings originally targeted and has identified an additional £3.4m of new savings schemes to fill the gap. All recruitment will be scrutinised by the senior management group.
The trust is now run by Circle, in a controversial 10-year franchise deal. HSJ calculated in May that the trust would need to make a surplus of at least £70m over that time before Circle was obliged to pay back the full £40m of the trust’s debts. Circle will also have to fund the first £5m of any deficit.
The trust finished the quarter with a deficit £0.65m greater than planned and warned that its cash balance could fall to under £1m by the end of September.
Delivery of cost improvements should push this balance up again in the second part of the year but the trust warns that any further slippage could mean it “may need to consider what access it has to loans and other cash injections to bridge the period”.
Overall, the report reveals an organisation struggling with the same issues which affect many NHS organisations. While income for the first three months of the financial year was above plan by £0.2m, this was swallowed up by overspends in other areas including the cost of locum consultants, “subject matter experts” and procurement expertise.
The trust is 26 per cent behind target on referrals and admissions from outside Cambridgeshire. Its income from A&E is also being restricted by the number of patients it is seeing - as it goes above the agreed cap, the trust is only being paid 30 per cent of tariff.
Against that, the trust did exceptionally well in the “net promoter” system being introduced by NHS Midlands and East, with 89 per cent of patients questioned saying they would recommend it to family and friends.