FINANCE Trust does not have a 'hope in hell' of recovering £30m deficit

Published: 06/10/2005 Volume 115 No. 5976 Page 6

Surrey and Sussex Healthcare trust would be bankrupt if it was a company, trust chair Roy Davies has admitted.

Mr Davies, speaking at the trust's annual general meeting, painted a bleak picture of the trust's financial position, saying the battle was just to live within its income and it did not 'have a hope in hell' of paying back its£30m deficit.

Nearly 100 people, including many staff, heard finance director Duncan Brodie warn that if the performance of the first five months of the year continued, the trust would end the year between£30m and£33m in deficit, pushing its accumulated deficit to more than£60m.

'Our biggest concern at the moment is cash; we are experiencing real challenges in meeting our cash obligations to suppliers, ' he said.

The strategic health authority has helped with£35m emergency funding, but repayment of this is due to commence later this financial year.

The trust's expected income for this financial year is£138m, although service-level agreements have yet to be agreed with primary care trusts.

Its expenditure could be as much as£175m, although a£10m costcutting programme, including theatre closures, restriction on the use of agency staff and sending electives elsewhere, is now in place.

But former deputy chair Robin Eve, who was ousted earlier this year, said the new board must be fearless in highlighting funding problems.

'Realistically, this trust is facing a black hole, ' he said. 'If this goes on we will be facing the closure of Crawley Hospital.' Mr Davies said that the trust 'would not be allowed to raze Crawley Hospital to the ground and put houses on it'.

New chief executive Gary Walker said the hospital had costs that are between£17m and£20m too high due to high administrative costs, the trust's dependence on agency staff, and its relatively long lengths of stay.

But a£10m cut in costs would make the trust an efficient provider, even though it might still end up with a deficit of between£10m and£15m.

'I have to get more work going through the hospital, which is difficult in an NHS that wants to do less in hospitals, ' he said.

'Crawley Hospital is a major accident and emergency department next to Gatwick [airport]. There is no question that we will not be there, but there will be many discussions on how much elective care we provide.' Elective care 'pays its way, ' he said. 'Where I lose money, it is on emergency care because of the local payment by results system'.

. Former chief executive Ken Cunningham was paid between£265,000 and£275,000 in his last year with the trust, accounts reveal.

This included an 'agreed compensation for loss of office' - his base salary was£120,000-£125,000.

Anthony McKeever, who was acting chief executive after his departure, was paid£52,769 for his work from February 4 to March 31.

Mr Walker told the annual meeting he was being paid£115,000 a year.