STRUCTURE: Merging or being taken over to achieve foundation status is “not on the agenda at all” for financially-troubled University of Leicester Hospital Trust, its finance director has told HSJ.

The trust is forecasting to make a £7m loss in 2011-12 and Leicester, Leicestershire and Rutland primary care trust cluster has agreed to provide £15m of “transitional support” this year.

The trust has achieved just half the cost savings it was hoping to make at this point in the year and has appointed turnaround directors to help with its recovery plan.

Despite the trust’s problems and rumours that it could merge with George Eliot Hospitals Trust, finance director Mr Seddon said a partnership or takeover ahead of gaining foundation status was “not on the agenda at all”.

Regarding its FT plans, Mr Seddon said: “We have a clear task in front of us to improve the efficiency of the hospital. We’re not thinking ‘if only we were merged with Nottingham or Birmingham’. We run three very large hospitals in Leicester and have a very clear agenda for the good of our patients.”

The turnaround advisors from consultancies Deloitte and Finnamore are examining the trust’s 600 CIPs – worth £38m, or 5.6 per cent of operating costs - and are due to present a risk register at a meeting this week.

Mr Seddon said they had been looking at “broadly similar” issues to those flagged up by the trust in its most recent register.  These included the number of loss making services, the danger that care quality could suffer and “loss of liquidity”.

Local media reported in August that chief executive Malcolm Lowe-Lauri had described the lack of cash in a leaked memo as “catastrophic” and said there was a “real issue about whether we will be able to pay our staff by August and September if the present run rate continues.”

Mr Seddon said he was “concerned about the cash position”. But he said the trust was working hard on a stabilisation plan, part of which involves reducing spending on bank and agency staff.

In addition, the consultants will work on “transformational” projects such as a planned shared pathology service with Nottingham University Hospitals Trust, an IT tender and improved patient pathways.

“We need to ensure that whatever changes we put forward are clinically led and clinically appropriate changes,” Mr Seddon said.