Cash crisis worsens as Barnsley NHS trust plunges deeper into red

Barnsley Hospital
Barnsley Hospital
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The full extent of a financial crisis engulfing a Yorkshire NHS trust is much graver than expected - and could get worse, health chiefs have revealed.

Managers at Barnsley Hospital NHS Foundation Trust revealed last month they were investigating “financial irregularities” which had unexpectedly plunged it into the red.

Latest estimates suggest it was £7.4 million in deficit in 2013-14 despite assurances as little as two months ago that it was heading for a surplus.

Officials are said to be carrying out a number of investigations into how the debts accrued after it spent nearly 10 per cent more than originally planned.

It has emerged the deficit has built up partly due to a failed bid to hit key A&E targets by employing temporary staff at premium rates, repeated failures to achieve savings targets across a host of areas and a significant overspend on capital investment projects.

Meanwhile its finance director Janet Ashby is on sick leave and an interim executive has been drafted in to fill her post.

Within weeks, regulator Monitor is expected to reveal what actions it plans to take at the trust over the crisis.

Bosses are refusing to comment on the nature of what they describe as “financial irregularities” pending the outcome of their inquiries but it is understood police are not involved.

Last night chief executive Diane Wake, who joined the trust six months ago, confirmed its end-of-year financial position was an unaudited £7.4m deficit.

“We have commenced this new financial year with a deficit of at least £7.4m however, we expect that this position could worsen. Exact figures are being confirmed as part of our investigations, which we expect to conclude shortly,” she said.

“In addition to our own investigations and the actions we have already taken, we are producing a two-year recovery plan detailing the future actions we will take to turn our position around, which will be submitted to Monitor.

“We would like to reassure patients that quality patient care remains a priority and that we are continuing to provide the same high level of care that our patients need and deserve.”

The trust declared a serious incident last month when it emerged it faced debts of £2.4m for the 11 months to February. The latest estimated debt of £7.4m comes after its costs were £14.3m over target.

Official papers reveal it had aimed to achieve a £1.6m surplus and as recently as two months ago Mrs Ashby had assured the trust’s board that despite a deteriorating position she anticipated a “worst case scenario of a £575-£600,000 surplus” in 2013-14.

Latest figures reveal the trust failed to achieve savings on a series of projects during 2013-14.

A transformation programme to save £2m partly through ward closures achieved barely £250,000 in efficiencies and another with a savings target of £4.1m achieved only £1.6m.

Total pay costs were £6.3m more than expected mainly due to unplanned spending on agency staff on escalation wards set up to help achieve the A&E target.

Capital spending of £19m also overshot by £2.6m on a series of investment projects.

The position would have been worse had not income been nearly £4.3m more than expected.

Final figures show 94.1 per cent of patients were seen in the hospital’s A&E unit within four hours in 2013-14, below the 95 per cent target. It was achieved in March but partly because consultants covered rota gaps mainly at night which were due to be filled by junior colleagues.

The trust is recruiting key staff to fill vacancies in services connected to emergency and urgent care but shortages of junior doctors are expected to worsen in the autumn, forcing the trust to consider international recruitment.