FINANCE: Mid Staffordshire Foundation Trust has sunk so much money into resolving its care quality failures it will run out of cash by December unless it secures a bailout.

Darren Cattell, director of finance and performance at the trust, this week told HSJ that Mid Staffs was operating at a trading deficit, “due to the level of investment that has been made in improving the quality of services”.

Mr Cattell added: “Despite careful management, this deficit has led to a shortage of cash and the directors are not able to state that there is currently a plan in place to ensure sufficient cash in the bank for the next 12 months.”

He said that this meant the trust could not demonstrate it was trading under the “going concern” basis. This concerns audit rules requiring organisations to have sufficient cash in the bank for the next 12 months of normal trading.

Mid Staffs’ latest finance report says at the end of July it was forecasting a £20m deficit and a planned £18m overspend for 2011-12. The report forecasts it will move to a “negative cash balance” in December without additional support.

Mr Cattell said the trust was working with commissioners and its strategic health authority to secure short to medium-term cash support.

The aim is to finalise this agreement by mid October, meaning final approval of the trust’s 2010-11 annual accounts will need to be delayed.