Worcestershire Acute Hospitals Trust may need an increase in its borrowing limit to cover the costs of a major service reconfiguration, HSJ has learned.

The trust has revised down a PFI deal to deliver radiotherapy services at the Worcester Royal Hospital in 2014 from £24m to £22m but still risks hitting its borrowing limit.

Last week it emerged the trust had applied for a £21m capital loan from the Department of Health due to on-going “legacy debts.”

If the DH approves the capital loan of £21m, to be repaid over 7 years, the trust would hit its prudential borrowing limit of £43m.

However, the trust is at the centre of a major reconfiguration of its acute services across three hospital sites in Kidderminster, Worcester and Redditch.

A clinically-led joint services review, set up by NHS Worcestershire, is expected to recommend significant centralisation of services, requiring capital investment on top of the money already borrowed.

The trust’s tripartite formal agreement for reaching foundation trust status, signed in June this year, states: “Given that the trust currently has a Prudential Borrowing Assessment of £43m, there is a risk that the trust will be constrained in moving forward with its future strategy due to dealing with the legacy debt issues.

“Therefore, it will be necessary for either flexibility in the overall PBA limit or some alternative funding arrangement to be agreed.”

Director of finance, Chris Tidman, said the value of the working capital loan was “in the process of being determined”.

He said the issue of whether the trust could afford the investment required from the Joint Services Review would depend on what the final reconfiguration of services would look like and the final PBA amount.

He added the trust would only be able to seek a review of the PBA once the JSR produced its preferred option and outline business case later this year.