Hinchingbrooke Health Care trust has received a £9m refund from the Department of Health, after an administrative error by the trust left it £13.5m out of pocket.

The Cambridgeshire trust has had to wait almost a year for its refund, which will mean it can report a smaller deficit at the end of this month.

The error happened in March last year during the transition to payment by results. Under the rules, trusts operating under tariff paid money into a central fund for distribution to trusts that were over
tariff.

But the trust filled in its forms incorrectly and paid the DoH£19.1m instead of£5.6m - an overpayment of£13.5m.

When the trust realised its error, it asked the DoH to return the money - but the department refused.

Interim chief executive Jane Herbert told HSJ: 'It initially said the money had already been allocated to other organisations and had been spent and could not be retrieved. It was a major blow.

'But after a great deal of persistence, assisted by NHS East of England, the DoH has informed us that it will be refunding us£9m of the£13.5m.'

The department held back the remaining£4.5m because it had been reallocated to Cambridgeshire primary care trust and therefore was in the same health economy, she said. 'We are just so pleased to have got any of it back that the thought of going into battle with our PCT, which cannot at any rate afford to pay, seems untenable.'

The money will reduce the trust's debt from a projected£30m at the end of March to£21m.

Ms Herbert left the trust last weekend having put a strict financial management and turnaround plan out for consultation by Cambridgeshire PCT. The consultation ends on 22 May.

Ms Herbert said: 'When I arrived here we were talking about closing large swathes of the hospital. We are now consulting on a plan that would save 99 per cent of the range of services.'

However, the plan would see the hospital lose 25 per cent of its activity and therefore reducing its capacity substantially.

A spokesperson for the DoH confirmed that it had made the payment but said: 'This is an isolated case.'

Former Essex strategic health authority director of finance Mark Millar is to take over as chief executive of the trust. Ms Herbert will return to management consultancy.

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