Health trust facing fresh cash crisis

Paul Jeeves

A BELEAGUERED health trust which was one of the most overspent organisations in the NHS is facing a new financial crisis despite being ordered to clear its debts by the Government.

The primary care trust (PCT) covering North Yorkshire has already accrued a 4m deficit during this financial year, and senior officials have admitted that the situation is expected to worsen significantly.

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The chief executive of NHS North Yorkshire and York, Jayne Brown, confirmed that the trust could be facing debts of up to 8m by the end of March, provoking concerns that finances could spiral out of control.

An unexpected rise in the number of hospital admissions has been blamed as one of the main reasons for the growing debts after the PCT had managed to claw its way back to financial parity at the start of April last year.

The chairman of North Yorkshire County Council’s scrutiny of health committee, Coun Gareth Dadd, stressed that any further cost-cutting measures could not be allowed to impinge on front-line NHS services.

He said: “This is obviously of a huge concern, and the deficit cannot be allowed to mount up to the level it was at a couple of years ago.

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“With this cloud hanging over the county’s NHS provision, there will be very real fears that front-line services could be affected, and we must make sure that this does not happen.

“I would hope that the PCT will be knocking on the door of the Government to petition for more funding. But it is also down to the PCT to show that it has enforced the necessary financial controls.”

Of the 14 PCTs across the region, the trust covering North Yorkshire is facing the biggest deficit by far.

At the end of November last year, only Kirklees and Sheffield PCTs had recorded any deficits, although both have predicted these will be cleared by the end of March.

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The Kirklees trust had a 350,000 overspend at the end of November, while Sheffield faced a 274,000 deficit.

The North Yorkshire PCT was ranked as one of the most overspent health organisations nationally after it inherited the financial deficit during a restructuring of the NHS in 2006.

The vast geographic area of England’s largest county has put North Yorkshire’s health service under intense pressure to provide adequate care to communities in often remote areas.

Concerns have also been raised over the amount of funding the PCT secures each year from Westminster as the formula is worked out per head of population.

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While North Yorkshire remains relatively sparsely populated, many of the county’s residents are elderly and have placed health services under additional strain amid a need for ongoing care.

After the PCT accrued debts of more than 36m, the Department of Health ordered the trust to carry out a widescale review to curb its deficits by the end of the last financial year.

While this was achieved, the unexpected increases in the number of hospital admissions as well as escalating costs for the treatment of mental health patients in secure units have been blamed for the subsequent multi-million pound debts.

The impact of pharmacy contracts and the cost of prescription drugs have also compounded the precarious financial situation.

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Ms Brown admitted that the trust’s growing debts were“not acceptable”, but she maintained that every effort was being made to minimise the deficit by the end of the financial year.

She also stressed that the deficit needed to put into context as it was less than one per cent of the trust’s annual budget of 1.2bn.

Ms Brown added: "We continue to improve in all areas of our work and we will not allow this issue to divert our focus from quality of provision based on best evidence.”