East Kent hospitals trust brings in measures to combat £39 million black hole in finances

Hospital trust finances

By Local Democracy Reporter Daniel Esson

A debt-ridden hospital trust that serves 700,000 people is on the brink of “running out of cash” prompting concerns over primary care.

East Kent Hospitals University Foundation Trust (EKHUFT) haemorrhaged £8.4m more than forecasters predicted, just five months into the financial year.

It means the organisation, which runs five hospitals in the county including Margate’s QEQM, has this year racked up a  £39 million black hole.

‘Deficit of £39 million’

A trust director revealed the dire financial straits in a board meeting on Thursday (September 7).

Richard Oirschot, a non-executive, told board members: “The trust’s deficit of £39 million in the first 4 months is some £8.4m worse than the planned deficit of £30.6m.

“As a result of the current adverse performance and lack of progress on the trust improvement programme delivery for 2023 – 2024, the financial plan for a deficit of £72m this year looks extremely challenging.

“The trust is likely to run out of cash by the end of November, unless revised forecasts are agreed with NHS England or performance changes dramatically.”

The report explains the organisation lost money to strikes, agency staff costs, and failure to deliver planned savings.

Former nurse Peggy Pryer, who spent decades caring for families before becoming a healthcare campaigner, argues poor financial management is “already having an effect on services.”

Explaining the trust employs significant numbers of agency staff, she said: “I’m extremely concerned about the safe staffing levels.”

She suggested the cost of senior management may be a contributing factor to the deficit.

“We’ve got all these directors – you look at the salaries of those directors sitting round that table, and you see the pittance that people are working for on the shop floor of direct patient care,” she said.

Measures taken to reduce costs

At its last overall inspection by the Care Quality Commission in 2021, East Kent Hospitals trust was rated “requires improvement.”

The trust stressed that an NHS body cannot run out of money to the point of being unable to pay staff or run services.

Instead, when a trust runs out of money, its budget has to be reforecasted through a process called the National Protocol,  with NHS England, and new money made available.

Michelle Stevens, Chief Finance Officer for the trust, said: “Our current financial forecast for this year is higher than planned.

“To mitigate this, a number of changes have been made that will enable us to improve our productivity and improve our financial position.

“These measures include stricter controls on recruitment to non-clinical jobs, reducing our use of agency clinical staff significantly by recruiting permanent staff and introducing an investment oversight group to sign off any expensive purchases other than drug or essential equipment supplies.

“We are already working with the Integrated care board and partner organisations as part of the national planning process to ensure there is no impact on patient care.”

In 2012 the South London NHS Healthcare Trust – which ran three hospitals in Greenwich, Bexley and Bromley – was scrapped in the face of financial woes.

The trust was placed in administration after accumulating debts of almost £150 million, losing about £1m a week, and it was carved up between other NHS bodies and private companies.

It’s rare for NHS trusts to fall into such a state, but when in especially dire financial straits they can be placed into administration, special measures, or scrapped and their functions taken up by other NHS bodies instead.

‘Starved of resources’

Polly Billington, Labour’s Parliamentary Candidate for East Thanet, said: “This is a shocking but not surprising state of affairs. The NHS has been starved of resources by the Tory government for so long that East Kent Hospital Trust is now at crisis point.

“Enough of sticking plaster politics. We need a Labour government that will support our NHS, train and recruit more staff and ensure we get the service we need here in Thanet. “