Published: 31/10/2002, Volume II2, No. 5829 Page 8 9
One of the three strategic health authorities being bailed out by the NHS Bank is predicting debts of£30m by the end of this financial year - even on top of the£30m extra funding it will receive.
Surrey and Sussex SHA is to discuss a projected£28.8m shortfall at its board meeting today, after the latest figures from trusts showed that the financial position has continued to deteriorate. The largest difficulties are caused by prescribing overspends.
The NHS Bank agreed£30m in support for the SHA to help deal with an overall£68.4m shortfall, of which around£28m was projected as a current year deficit.
However, the financial position to be reported to the SHA board shows that a 'residual shortfall' of£28.8m is now predicted, despite the assistance from the bank.
The situation has deteriorated so much that the SHA wrote to all trusts recently asking them to check the accuracy of any figures they had submitted, and to see if there was anything that could be done to improve their position.
SHA finance director Barry Elliott said the figures were so worrying that trusts had been asked to check that they were correct.
The financial report to the board meeting from Mr Elliott says the net result of the worsening of the situation has been to leave the health economy with the predicted£30m shortfall as well as 'a significant underlying financial deficit and some significant financial risks to be managed'.
The shortfall before efficiency savings and the bank support is shown as£128.5m, with cashreleasing efficiency savings expected to produce£69.7m.
However, Mr Elliott says there are significant risks within the position, 'in particular, that related to the delivery of a very high level of cash-releasing efficiency savings'.
The SHA report says the most significant financial pressure relates to GP prescribing, where current forecasts 'indicate a potential overspend at year-end of£16m', even after an average uplift to prescribing budgets of 10 per cent in the current financial year. Other pressures have been 'continuing problems with delayed transfers of care and increasing dependency on the use of agency and bank staff '.
Although the position of individual trusts in the area is variable, trusts that had been expected to be in balance are now projecting deficits. Brighton and Hove City primary care trust forecast a deficit of£1.5m in September and expects this to have worsened by this month.
Trust finance director Mike Scofield said the two main problems for the PCT had been prescribing overspends and out-of-area specialist referrals.
He said: 'We have assumed that trend will continue. The next forecast is going to show a worsened position. The main problem is around prescribing.
There was an uplift of 10 per cent and it is coming in at 12-13 per cent, and 2 per cent is just short of£1m.
'How are we going to break even?
We do not want to interrupt service development. We are looking at what further support we can give to manage prescribing budgets and we are looking at cases under the out-of-area referrals.'
Mr Scofield said there were also problems with the use of agency staff and using the private sector, and that no further spending commitments could be made without the approval of the chief executive.
The financial position in Avon, Gloucestershire and Wiltshire SHA has also deteriorated dramatically, with local organisations last month forecasting deficits by the end of the year standing at£65.7m, compared to 'planned deficits' of£24.5m forecast at the start of the year. This is despite being allocated£45m from the NHS bank.
On top of this there are also accumulated deficits from 2001-2 of£16.6m 'which must be recovered within a three-year (or extended five-year) period to meet statutory financial duties'.
Last month's SHA board meeting was told the main extra costs have included increases in prescribing costs above budgeted figures of£10.4m, a shortfall of£4.6m on anticipated savings over and above cash-releasing efficiency savings, out-of-area placements, and meeting access targets in Bristol and Bath.
Bedfordshire and Hertfordshire SHA, which was promised£25m by the bank, was predicting a£1.6m overspend at its September board meeting.