FINANCE: Mid Essex Hospital Services Trust has “weak governance” and “major financial issues” which threaten its bid for foundation trust status, according to board papers.

The trust has been classed as an NHS trust with “major financial issues e.g. PFI/legacy debt currently making difficult to achieve FT-status in near future”.

The tripartite formal agreement between the trust, the Department of Health and the strategic health authority discloses details of the trust’s PFI scheme for a new hospital wing, the contract of which commenced last August. Current payments are circa £14.7m per year, totalling £129m over the life of the contract with Chelmer PLC.

The document said the trust achieved £15.5m of its £23.6m cost improvement plan for the 2010-11 financial year. This year’s target is £24.9m.

It reveals that in February did not have a “quality, impact assessed CIP programme” for this year and next.

It also said there was “uncertainty” on the outcome of contractual negotiations for 2011-12.

The document said there was a risk around vacant leadership roles at the trust as there was no permanent chief executive, director of nursing, director of finance, medical director or board secretary at the time of the report.

It said a risk was: “Weak governance systems and processes leading to poor quality performance, lack of learning culture and failure to meet CQC and monitor quality requirements under the compliance framework.”

A spokeswoman for Mid Essex said: “As in previous years we recognise that we have another ambitious saving target for 2011/12.  In January 2011 the trust in conjunction with its local health economy partners created a joint QIPP plan and has been, and are currently, working on detailing the operational elements of this. The savings plans for 2011/12, like every year is driven by the organisation’s need to ensure financial balance and stability, whilst at the same time continuing to provide excellent patient care.

“Permanent appointments have now been made to the Chief Executive, Director of Nursing, Director of Finance and Medical Director Board positions, so the Board has a full complement of substantive directors.”