Portsmouth trust misses deficit target despite PCT help

The trust’s finance report for November reports a year to date deficit of £1.46m by the end of September 2011 - £50,000 worse than planned.

The report says the trust has experienced “activity levels significantly above plan” so far this year. “This has meant that at the end of month six the trust has performed approximately £1.8m of activity ‘free of charge’”, due to payment caps built into its contracts with Portsmouth and Hampshire PCTs.

“The risk facing the trust is that if demand and activity continue at similar levels this would jeopardise the delivery of the trust’s year end break-even target as the trust would be incurring the costs of treating these patients but receiving no payment because of the cap on the contract.”

As a result, the trust has agreed a “financial recovery plan” for the rest of the year that will see an extra £3.7m paid by NHS Hampshire and NHS Portsmouth.

“The impact of this additional payment has been reflected in the month six financial position”, the report says.

At the end of month six the trust had achieved £11.2m of cost improvement plan savings against a plan of £12m. Although the trust is more than £1m ahead of target for internal savings, this is offset by a £1.9m shortfall associated with demand management.