Large teaching trust ended year with £118m deficit

The south London teaching hospital, which has a turnover of £1bn, is currently behind the financial plan it agreed with NHS Improvement.

In 2016-17 to date the trust’s deficit is £41m – £18.9m worse than planned, though £10m of that figure represents money the trust did not receive from NHS Improvement after missing its financial targets in the first quarter.

A report to September’s board meeting said: “The run rate was averaging a monthly deficit of £10.8m in quarter one. The deficit in month four was £8.8m, a £2m improvement on the quarter one average. The NHSI agency cap for the trust year to date was £10m and the trust has spent £14m with increases predominately in medical and nursing staff categories.”

It added: “The trust has drawn down £19.7m against its working capital facility in July and a further in £4.5m drawdown in August in order to maintain a minimum cash balance of £3m. The total value of the working capital facility drawndown as at month five will be £55.8m against a current approved facility of £89.6m.

“As the [working capital facility] cannot be utilised to improve creditor payment days and the trust’s available cash is insufficient to maintain creditor days, outstanding debts are increasing. This is putting pressure on supplier relationships and impacting on operational delivery.”

The trust is awaiting approval from NHS Improvement of £90m in additional working capital support.