Auditors for Hinchingbrooke Health Care trust have raised 'serious concerns' over its projected £38.7m deficit for 2007-08, as the trust's savings plans are not sufficient to cover it.
In a public interest report published by the Audit Commission, the auditors said the trust's financial position was so grave it would not be able to meet its statutory duty to break even by the end of March 2009.
Under resource and accountancy rules which were only partially relaxed last year, NHS organisations must balance any year's overspend with an underspend in a subsequent year. Hinchingbrooke was given five years to do this, but by 31 March this year it will have a cumulative deficit of£40.5m.
The auditors acknowledged that the trust had suffered from policy changes beyond its immediate control. It had built a£22m private finance initiative treatment centre just as primary care trusts shifted their focus from hospital to community care, and its income for 2006-07 was capped by£10.1m under transition arrangements for payment by results.