- University Hospitals of North Midlands says finance regime has cost the organisation £19m
- Provider says £3m had to be set aside for external support related to the financial recovery programme
- Plans to cut headcount by 288 to save £10m
An acute trust in special measures has claimed the national financial regime for NHS trusts has resulted in £19m of extra costs and lost income.
University Hospitals of North Midlands Trust, which was placed in financial special measures in 2017, suggested this has added additional cost pressures.
In an email to a local patient representative sent via the trust’s communications team, Helen Ashley, deputy chief executive and director of strategy and performance, outlined the financial impact of being in special measures and not signing up to its “control total”.
In particular, she listed the following items which have affected the trust since the start of 2017-18:
- £10m in fines and penalties levied by commissioners as a result of NHS Improvement not readjusting its control total in 2018-19;
- £6m in “punitive interest rates” which have been levied against the trust since it entered special measures;
- £3m which the trust has had to set aside in 2018-19 to fund the cost of external support for the financial recovery programme; and
- £28m in provider sustainability funds “not received by virtue of the fact that the trust cannot deliver against the control total set nationally [by NHS Improvement]”
She added that “in revenue terms the impact is therefore £19m as arguably the trust received the cash, not received through the [provider sustainability fund] in loans”.
The trust received more than £100m in cash loans from the Department of Health and Social Care to support its payments to staff and suppliers in 2017-18. However, this does not count as income or contribute to financial performance.
For both 2017-18 and 2018-19, the trust said it was unable to agree to the control total set by NHS Improvement. Under national rules, trusts that do not agree to their control total are not able to access sustainability funds.
The trust was offered a small surplus control total in 2017-18, but rejected this and planned for a deficit of £120m instead. It subsequently reported a £71m deficit for the year after being placed in financial special measures.
It has planned a deficit of £44m for 2018-19, but has warned this could deteriorate to £69m unless mitigating action is put in place.
Last week, the board announced it would be implementing a recruitment freeze across four divisions as part of its savings programme. According to the trust board papers, published on 4 December, the provider is set to reduce its headcount by 288, equating to around £10m in savings. The trust told HSJ the recruitment freeze related to managerial and clinical admin staff rather than clinical roles, such as nurses or doctors.
Meanwhile, Marcus Warnes, accountable officer for the six clinical commissioning groups in Staffordshire, told HSJ the national special measures programme had “made things more difficult” in terms of system working.
He added: “The financial special measures programme forces UHNM off on one course and the CCGs, working with NHS England on delivering our control total, are pushed off in a different direction.”
A spokeswoman for NHS Improvement said: “We are providing intensive support to the trust through our financial special measures programme to help improve its financial management and the trust has made significant improvements.
“Control totals are set as part of a standard process operated consistently across the sector.”
This story was updated at 12:45 on 20 December after HSJ recieved a response from NHS Improvement.
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