Royal Cornwall chief quits as deficit doubles to £15.8m

The chief executive of a hospital trust has fallen on his sword after the trust's deficit was found to be twice what was originally claimed.

Brian Milstead, chief executive of the Royal Cornwall Hospitals trust for 13 years, resigned saying: 'I have to accept responsibility for the current financial situation and feel that the time is right for a new appointment to guide the trust forward to foundation trust status.'

In March, the trust had predicted a£8.1m deficit for 2005-6, but when the final accounts were analysed, this had risen to£15.8m.

A trust spokesperson said: 'A number of assumptions that had been made in-year were over-optimistic.

'Our utility bills were nearly£800,000 more than had been budgeted for at the beginning of the year. Increased usage of high-cost cancer drugs had a big impact. And there were a number of other factors such as implementing Agenda for Change. There were some issues around capital depreciation as well.'

The trust is developing a turnaround plan which will aim to recoup the money over two years. Details will be revealed at a board meeting later in the year. The trust has its main acute site in Truro but also runs hospitals in Penzance and Hayle; because of the long distances involved, it is expected to try to preserve services in Penzance despite the need for savings.

Director of delivery Paula Friend has taken over as acting chief executive. Mr Milstead - who has already left the trust - is pursuing a career in healthcare consulting.

Trust chair Professor Colin Roberts said: 'Brian is one of the longest-serving chief executives in the NHS and, under his visionary guidance, acute healthcare in Cornwall has been transformed.'