Local NHS Trusts' Deficit Larger Than Expected

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Management says that shortfall will not impact patient services

Trusts believe cost cutting will enable breakeven budgets in the future

July 23, 2024

Four London NHS Trusts have confirmed no patient services will be impacted after reporting a combined deficit almost £18 million larger than anticipated.

A report compiled for the North West London Acute Provider Collaborative (APC) said the gap is due to factors including inflation and a host of operational challenges, such as pressures on support for mental health patients.

The APC, which consists of Imperial College Healthcare NHS Trust (ICHT), Chelsea and Westminster NHS Foundation Trust (CWFT), London North West University Healthcare NHS Trust (LNW), and The Hillingdon Hospitals NHS Foundation Trust (THH), said all four partners are ‘committed’ to delivering breakeven budgets for 2024/25.

These trusts manage local hospitals such as Charing Cross, Hammersmith, West Middlesex, Central Middlesex, Ealing and Chelsea & Westminster.

In papers published to accompany a Board In Common meeting held last week, it was noted that at month two of the current financial year, so May, “the APC reported a deficit of £23.9m against a year-to-date plan of £6.1m, a £17.8m adverse variance to plan”.

All four of the Trusts were running up deficits bigger than expected, it added, with THH’s £8.96m the largest, £8.06m more than anticipated. This was followed by LNW’s £8.5m (£6.3m over), ICHT’s £4.1m (£1.5m over), and CWFT’s £2.3m (£1.9m over).

The APC’s combined cash balance was also recorded as showing an adverse variance. Standing at £279m at the end of May, this was £59.5m down since the end of the previous financial year, and £45.3m lower than the May cash plan.

A report compiled by Helen Berry, Associate Director of Finance, detailed how the main drivers of the deficit included planned mitigations yet to be implemented by May, such as a System Optimisation Proposal, and the impacts of operational pressures and excess inflation.

A spokesperson for the APC confirmed no patient services will be affected by the deficit, and that it has already worked up most of its cost improvement plans needed for this year.

They said, “All four Trusts are committed to delivering their own breakeven budgets for 2024/25 (excluding the impact of industrial action).

“Each Trust is putting its own measures in place to help achieve this, including accelerating planned cost improvements, further tightening of financial controls, especially on the use of agency staff, and further increasing planned care which will bring in more income as well as reduce waiting times.”

Research published by the BBC earlier this year indicated ICHT, which runs hospitals including Charing Cross and St Mary’s, had the largest high-risk repair backlog in England.

The data showed the backlog to be £393m for 2022/23, constituting about 20 per cent of the national total, with £25m spent annually on the highest-risk issues.

 

Ben Lynch – Local Democracy Reporter