FINANCE: The foundation trust was reporting a deficit of £5.8m in November against a planned deficit of £4.3m, representing a negative variance of £1.5m.
The foundation’s finance committee was told this “reflected a worsening in month position”, with an adverse variance to the plan of £758,000. Pay has overspent by £542,000 and non pay has significant overspent by £521k.
There is an ongoing issue with CRES (cash releasing efficiency savings) not being achieved as per the original plan. Non executive director Roger Carder noted that no departments have achieved their cost savings.
Finance director Darren Cattell warned that, unless schemes were releasing savings, new CIPs (cost improvement plans) would now be focused on. Of the original CIPs, £1m has so far been achieved, which relates to depreciation and drug savings.
In respect of cash, Mr Cattell said Monitor and the Department of Health had been supportive in recognising the extended period of time required for the trust “to turn around”.
The committee was told: “In the short term the trust needs a financial plan from now until summer and needs to secure additional cash into the organisation. Currently it is felt that the trust will run to a negative cash balance in March, looking at middle to worst case scenario.”
21 December 2010