NHS trust ‘will not be the last’ to seek loans
A HOSPITAL trust in Yorkshire has warned it isn’t alone in facing a “deteriorating” financial position as it confirms it is now preparing to take out loans to secure its immediate future.
Leaked emails sent to board executives and senior managers, seen by The Yorkshire
Post, confirm the York Teaching Hospital NHS Trust is set to exhaust its cash reserves by October.
Revealing it is now preparing to “run out of cash” for the first time in its history, hospital trust chief executive Patrick Crowley called on board members and senior managers to put its financial recovery at the top of the agenda.
Now, as the hospital trust which runs services in Scarborough and York moves to reassure patients over safety and quality of care, it warns that it won’t be the last in the region to seek loan support.
“Across both the local and national health system there are significant financial pressures and the trust is not alone in needing to tackle a deteriorating financial position, whilst ensuring the continuation of safe and effective healthcare services to our patients,” a spokesman said.
“Several years of demanding efficiency targets coupled with increasing costs, for example with agency and locum staff, has made the delivery of our plans all the more challenging.
“The trust has an excellent history of good financial management, however increasing pressure over recent years have taken their toll. Our organisation is a long way from being the first and almost certainly will not be the last to seek external support.”
The leaked email, sent by Mr Crowley, warns the trust now has a weighty deficit and will exhaust its reserves within coming weeks.
The trust now has a deficit of £13.8m, he said, revealing that it is set to exhaust its cash reserves by October this year.
“For the first time in the trust’s long history we will run out of cash and will have to enter the Foundation Trust Distressed Cash regime,” he said. “This means we will be taking out a loan for working capital, the terms of which require interest payments – further increasing our costs – and eventual loan repayment.”
The email confirms this will place the trust under “significant” enhanced scrutiny and will start to see the removal of investment choices.
A draft plan has now been drawn up to set out financial recovery, the email said, and the trust will work with regulators and others that are experiencing similar difficulties.
“I now expect the trust’s financial recovery to appear at the top of the agenda and your personal objectives for the coming year,” Mr Crowley concluded. “Managing our resources as effectively as possible is vital to the security and stability of the clinical care we offer as well as allowing ourselves the choice to continue to invest.
“It is going to feel very different in the trust for a period of time and this is going to impact on all directorates and all areas.”
The trust operates hospital and community services covering York, Scarborough, Bridlington, Malton, Selby and Easingwold. There has been a recent change to the way hospitals received funding from CCGs, and the trust has said “difficult decisions” will have to be made.
Reiterating that draft recovery plans are being drawn up to improve the local financial position, the trust spokesman said: “There will be some difficult decisions to make but managing our resources as effectively as possible remains our priority to ensure the safety and stability of the clinical care we offer to our patients. Staff, or suppliers of services to the trust, should not be concerned about the ability of the trust to meet its financial liabilities.”