North Yorkshire and York faces ongoing financial difficulties

The massive organisation commissions more than £1bn in spending a year and is due to limp to a breakeven position for 2010-11, having predicted a £17.7m surplus at the start of the financial year.

The financial problems go back years. A major review by the strategic health authority is underway, with a mandate to decide which services the area wants to continue providing but with less cash, and which ones it wants to close altogether.

In February the PCT received a visible “additional allocation” of £5.7m – presumably one of many “bailouts” over the years. It is therefore unsurprising that questions have already emerged about whether, and how, it will afford to reserve 2 per cent of its cash for “non-recurrent” purposes – that is, not spent on routine provider contracts – which is a requirement of all PCTs under the operating framework.

Indeed, a May NHS Yorkshire and the Humber board paper suggested the PCT was exempt from the requirement, stating it applied to all its PCTs “with the exception of North Yorkshire and York PCT”.

The SHA has confirmed to HSJ the board paper was correctly worded, but hinted it was merely a fudge to allow North Yorkshire and York more time to work out how it would find the 2 per cent saving.

The reserve is intended to help PCTs pay for struggling services towards the end of this year, to develop commissioning consortia and to prepare the region for tougher times to come.

North Yorkshire patients had better hope the service review comes up with some answers.