Sandwiches withdrawn from trust with cash flow problems

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Shrewsbury and Telford Hospital Trust has asked some external suppliers to accept later payments, which has prompted a sandwich firm to withdraw its products
Trust has a cash shortfall of more than £8m, so will seek to delay payments until next year
The DH introduced new restrictions on cash support offered to trusts last year

An acute trust is seeking to delay up to £8m of payments due to cash flow problems, leading at least one supplier to withdraw its products.

Shrewsbury and Telford Hospital Trust has asked some external suppliers to accept payments in 2017-18, which has prompted a sandwich provider to stop its account.

sandwich

A sandwich supplier refused the trust’s new payment timetable

An email to trust staff this week said: “In order to help us achieve our (financial) target, the trust has asked external suppliers to temporarily alter the timescale for payments until the next financial year in recognition of the additional pressures we are facing.

“Unfortunately our current sandwich supplier has not accepted these terms. As a result… we will be unable to provide sandwiches and salads for patients or in our commercial outlets.”

In December, HSJ reported how the DH had introduced new restrictions on cash support offered to trusts, warning they could be refused bailouts even when suppliers are refusing to deal with them due to late payments.

Dozens of providers with large financial deficits have become reliant on “working capital” loans to ensure staff and invoices are paid.

Shrewsbury and Telford Hospital Trust’s latest finance report said it is forecasting a year-end deficit of £12.3m for 2016-17 without further action, against the planned £6m, while another £2m of income will not be received by March.

It is already set to receive a bailout loans of £6m from the Department of Health this year, but the report notes that this leaves a cash shortfall of £8.4m.

The paper adds: “To cover this cash shortfall, payments to creditors will need to be suppressed by £8.4m by the end of the financial year.”

Trust chief executive Simon Wright said: “We have taken a number of steps throughout the year to bring down our spending, including reducing our reliance on agency staff. However, further action is needed and we have had to make some difficult decisions about how these can be achieved while ensuring patient care is unaffected.

“The trust has asked some external suppliers to temporarily alter the timescale for payments until the next financial year in recognition of the additional pressures we are facing.

“Unfortunately our current sandwich supplier has not accepted these terms. We are now exploring new suppliers who can better manage slightly longer payment terms.

“The temporary issue with sandwich supplies has been addressed by providing alternatives and at no time have any patients not had access to meals or choice.

“We apologise for any inconvenience this may cause in the short term.”