FINANCE: Trafford Healthcare faces having its core contract for acute work cut from £75.5m to just £39.5m over the next five years, its latest finance report warns.

The trust started 2010-11 with a plan to deliver a £1.2m surplus, sufficient to meet planned loan payments and pursue its goal of becoming an integrated care organisation and a foundation trust, the paper stated. It finished the year with a deficit after impairments of £1.3m, having resolved to seek a partner to take it over.

The report, written on 15 April for the 24 May board meeting, continues: “The Trust continues to face significant challenges for the 2011-12 financial year. It has, as yet, been unable to set a balanced financial plan or budget.

“The Trust is in negotiation with NHS Trafford about the value and mix of work to be delivered in 2011-12 - a reflection of wider issues affecting the Trafford health economy and commissioners’ expressed intention to withdraw investment from acute care provided at the Trust from £75.5m in 2010-11 to a core commitment of c£39.5m over the next 5 years.

“Clearly this presents a considerable level of risk to the Trust and the related cash flow and liquidity issues are regularly communicated to the Board in order to ensure they are fully apprised.”