COMMERCIAL: A contract dispute between a clinical commissioning group and a trust in Shropshire has resulted in the CCG being placed in “financial recovery” and the provider pushed deeper into deficit, board papers showed.

The financial deterioration of both Telford and Wrekin CCG and Shrewsbury and Telford Hospital Trust followed the completion of a dispute arbitration by NHS England and the NHS Trust Development Authority.

According to the trust’s May board papers, one area of disagreement was about how much it was owed for rehabilitation services and how it had coded its stroke work.

As a result of the arbitration, completed in April, the trust received £2.5m more from the CCG than it had proposed paying. This favourable outcome left Telford and Wrekin with an initial £3.2m deficit for 2014-15, according to its board papers. Since then it has moved to a break even position.

Accounting spreadsheet

There was disagreement about how much the trust was owed for rehabilitation services

The CCG was also placed into financial recovery because it had not delivered its planned 1 per cent surplus at the end of 2013-14, according to NHS England’s Staffordshire and Shropshire area team. Ros Francke, director of finance for the area team, said financial recovery involved “a thorough and detailed review of [the CCG’s] financial plans to ensure that they are predicated on sound assumptions, and are therefore deliverable”.

She said the CCG had also introduced “additional temporary support to focus on the key aspects of their plan, to ensure they have the capacity required to implement the necessary changes”.

Ms Francke said her team would work with the CCG to provide continued assurance to NHS England that it is delivering as planned.

Telford and Wrekin was expected to recover its financial position by the end of 2014-15, allowing it to be moved out of financial recovery.

The CCG’s financial problems appear to have also hit the trust. According to Shrewsbury and Telford papers, the CCG’s financial position means £1.2m of “transitional support” funding, which the trust had expected this year, was now unlikely to be provided. This together with a reduction in support from Shropshire County CCG has caused the trust to increase its 2014-15 deficit forecast from £6.2m to £8.2m.

A trust spokesman said it did not expect its forecast deficit to have any impact on services.