Peterborough: Hospital 'Financially Unsustainable'

7 June 2013, 10:00 | Updated: 7 June 2013, 15:52

A report from the healthcare watchdog has found Peterborough and Stamford NHS Foundation Trust is 'financially unsustainable'.

Monitor says the Trust, which runs Peterborough City Hospital, provides 'appropriate patient care' which is usually 'within expected performance levels'.

However the report also states that 'the Trust built up a deficit of £37 million by the end of 2012-13, and needed one-off support from the Department of Health of £44.1 million'. 

The Trust’s forecasts for the next five years show a continuing deficit of £38 million or more each year, and a cash shortfall of at least £40 million a year.'

Monitor claims that, without further support from the Department of Health, the trust will not be able to pay bills, including wages for staff.

The watchdog has now asked a Contingency Planning Team (CPT) that was sent in by Monitor 'to work closely with patients’ representatives, commissioners and clinicians in the local area to identify options to make the Trust financially sustainable.'

Other findings in the report include:

The estate issues contributed an estimated £22 million to the deficit and include the under-utilisation of Peterborough City Hospital. 

This figure will increase with the effect of inflation in coming years.

The Trust has identified that three additional wards could be sited on the fourth floor of the hospital, potentially generating around £9 million of extra contribution. 

Peterborough City Hospital is provided under a PFI agreement that is costing £40m a year and has 31 years left to run. 

With inflation, the PFI is likely to represent a greater proportion of Trust costs in future years. 

However, ending the arrangement would trigger a very substantial one-off payment. 

In addition to the estates issue, the CPT identified that the deficit was partially caused by operational issues (such as £5 million of unpaid medical activity and £10 million of performance improvements which could be made) and are now factored in to the Trust?s forward plan.

Stephen Hay, Managing Director Provider Regulation said: "This report clearly shows that Peterborough and Stamford Hospitals NHS Foundation Trust is not financially sustainable. 

We now expect the CPT to advise us what practical options are available to close the financial gap and ensure continuity of service to patients. 

Monitor is ensuring the voice of patients and the local community are listened to, and that the health needs of local people will continue to be met for years to come."

Peter Reading, Interim Chief Executive at Peterborough and Stamford Hospitals NHS Foundation Trust, said: "This is a very useful report which confirms that our hospitals provide good quality care and, today, are properly run.

This is reassuring for our patients and testament to the skill, hard work and efforts that our staff put in every day. 

The report also confirms that the financial challenge we face remains perhaps the biggest in the NHS, and that while part of the solution is ever greater efficiency is in our own hands, more than half of the problem can only be tackled by broader measures across the local health economy and wider NHS. 

The figures in the report are broadly similar to those that have been published before by the National Audit Office and the Trust itself.

The report shows that the Trust has made excellent progress over the last 18 months in bringing in good financial management and, for the first time, delivering annual efficiency savings at the level which one should expect (£13.4million in 2012/13). 

We welcome the Contingency Planning Team's close involvement of our partners from across the healthcare economy in this process and I hope that this approach will bring about a range of practical options to enable us to achieve long-term financial sustainability. 

We now await the outcome of the Contingency Planning Team's second report which will present and evaluate the options for the Trust that it is currently developing for Monitor. 

Meanwhile, I would like to assure patients that day-to-day life in our hospitals in both Peterborough and Stamford continues as normal. 

Our twin priorities remain delivering the very best patient care, day in, day out, and finding a further £13m in cost improvement savings over the course of this financial year."