• Maidstone and Tunbridge Wells Trust plans to deliver £37m of financial improvements by March
  • Most of the improvements to be delivered through additional revenue
  • Regulators said trust’s pay bill growth was “excessive”

An NHS trust in financial special measures is now planning to deliver £37m of financial improvements by the end of the financial year.

Maidstone and Tunbridge Wells Trust had initially refused to agree a financial target for 2016-17 with NHS Improvement, but has now signed up to a control total that requires a dramatic improvement over the second half of the year.

The new plan assumes £14m of additional income, a capital to revenue transfer of £4.2m, and further technical accounting measures worth £3.5m.

There is also a financial recovery plan worth £16m, which includes slashing the overall pay bill. However, £9m of the recovery plan remains unidentified.

The trust was placed in financial special measures in July, and identified by NHS Improvement as one of 63 trusts that had potentially overspent on their pay bill. The regulator highlighted a possible in-year pay bill reduction of £2.3m.

A report to the trust board in September said: “Confirmation of the terms of financial special measures from NHSI had focused on the trust’s failure to agree a control total and decision to forecast a deficit (of £22.9m), as well as its excessive rate of pay growth over the past two/three years.”

The trust told HSJ the pay bill reductions “will mainly be achieved through a reduction in the use of temporary staffing”.

An inspection by the Care Quality Commission last year had raised concerns about staffing levels at the trust and the overreliance on bank and agency workers.

Although the trust’s original plan for this year was a deficit of £22.9m, the monthly run rate at the end of August suggested a year-end shortfall of £42m.

The trust’s new control total is a deficit of £4.7m, which means around £37m of improvements are required.

The original plan appears to have included an overly ambitious expectation to recruit permanent staff and reduce agency spending.

Last year the trust’s agency nursing bill was £22m, and it had planned to meet the £13.6m ceiling set by NHS Improvement for 2016-17.

The new financial plan assumes a year-end nursing agency bill of £16.4m, while forecast spending on locum doctors has risen by £4m. Forecast spending on substantive staff has reduced by almost £9m.

Most of the financial improvements will be made through additional revenue. A proportion of the £14m of additional income relates to contract penalties that will no longer be applied, but there also appears to be additional income planned through “high cost drugs” and other avenues.

The trust said the technical accounting measures include a “review of opportunities for provisions, prior commitments and asset valuations”.

According to trust’s October board papers, a capital to revenue transfer would be enabled through the deferral of “estates electrical upgrades” and a radiotherapy development at Tunbridge Wells Hospital.

If the control total is met, the trust would receive £9.4m of national sustainability and transformation funding, resulting in a surplus of £4.7m.

The trust said in a statement: “Maidstone and Tunbridge Wells Trust are working closely with NHS Improvement to support the development and delivery of financial efficiencies as part of our agreed control total for 2016-17.”

NHS Improvement has previously told HSJ it did not expect local capital to revenue transfers this year, and did not respond to questions around the trust’s recovery plan or pay bill reductions.