FINANCE: One of England’s biggest and most prestigious teaching hospital trusts has predicted a large deficit for 2014-15, with indications it will almost double in this financial year.
King’s College Hospital Foundation Trust, which has a turnover of £892m, reported to its most recent board meeting that at the end of March it had a deficit for 2014-15 of £47.4m.
This is a £19.4m deterioration on the previous year-end prediction. However, the trust’s full year, audited position has not yet been reported.
King’s is the latest large teaching hospitals trust to indicate it would be recording a deficit for the last financial year.
Barts Health Trust declared it was predicting a year-end deficit of £93m and Leeds Teaching Hospitals Trust is expecting a deficit of £52m.
King’s chief executive Tim Smart resigned last month and senior civil servant Lord Kerslake was appointed as chair in April. Lord Kerslake has ordered a board governance review that will report back next month.
The trust’s financial position could well worsen over the next 11 months, a trust document indicates.
Minutes of a meeting of the trust’s finance and performance committee meeting in January, published last week, show PwC consultants told the King’s senior management team that the “size of the underlying financial challenge pre-[cost improvement programmes] and non-recurrent funds [in 2015-16] is circa £112m”.
The consultants said this “plus a [savings] target of 6 or 7 per cent is a big challenge for the trust”.
They said the main pressures on the trust’s bottom line had been high temporary staffing costs, a low rate of savings delivery at its two main sites and a spike in emergency activity.
The trust had planned to make savings of £53.1m over the course of 2014-15 but only achieved £29.9m, according to the most recent figures.
The trust took over the running of the Princess Royal University Hospital from South London Healthcare Trust when the latter was dissolved in October 2013 on the orders of former health secretary Andrew Lansley.
In March, Monitor launched an investigation into King’s because of “long standing problems” at the Princess Royal.