FINANCE: Monitor has launched an investigation into University Hospital of South Manchester Foundation Trust’s finances.
The investigation will examine the provider’s short and long term finances, and establish whether its position is in breach of its foundation trust licence.
The regulator said the probe had been prompted by an independent report which it had commissioned and which was carried out by PwC.
In a letter to the trust, Monitor said that PwC concluded the trust did “not currently have a clear view of strategic and financial options to secure its long-term sustainability”. It cited increasing private finance initiative costs in 2014-15, and potential pathway changes from the Greater Manchester Healthier Together planned reconfiguration, as particular risks to sustainability.
In PwC’s view the trust was likely to deliver a deficit of up to £10m in 2014-15 and a continuity of service risk rating of 1 for 2014-15 and 2015-16.
The continuity of service risk rating measures the risk that a provider will be unable to continue as a going concern, with a score of 1 representing the highest risk rating.
UHSM funded a large new hospital wing and mental health unit at Wythenshawe hospital under a private finance initiative which was contracted in 1998.
The Healthier Together plan aims to integrate primary care, social care and hospital care in Greater Manchester, and is backed by the region’s 12 Clinical Commissioning Groups.
In its letter, Monitor also said it was concerned about the trust’s performance in relation to the four hour accident and emergency wait target and by its quality governance. The provider breached the A&E target in the last two quarters of 2012-13, and had a quality governance score of 4.5. Under Monitor’s framework, providers with a score of four or more do not receive foundation trust authorisation.
UHSM has engaged McKinsey to help it develop a two year recovery plan which is expected to be in place by the end of January 2014.
Monitor regional director Robert Davidson said the trust would be expected to stick to the plan, and that the investigation would help Monitor “identify any other financial issues which should concern us”.
In a response to the Monitor announcement, UHSM said they welcomed the investigation and had “already engaged… staff and governors in a recovery plan designed to overcome the financial hurdles over the next few years” without compromising the quality of patient care.
11 December 2013