Revealed: Norfolk’s hospitals rack up deficit of £30m

Doctors and nurses at the Norfolk and Norwich University Hospital. Photo: James Bass.

Doctors and nurses at the Norfolk and Norwich University Hospital. Photo: James Bass. - Credit: Evening News © 2009

The financial woes of the NHS are being mirrored locally as we can reveal Norfolk's hospital trusts are set to rack up a combined deficit of more than £30m this financial year.

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Latest figures show planned deficits at Norfolk and Norwich University Hospital (£9.5m), James Paget University Hospital (£4.9m), and Queen Elizabeth Hospital King's Lynn (£13.9m) will leave the local health economy with a big hole to fill.

It comes as the NHS nationally faces at least a £2bn deficit by the end of 2015/16, with the taxpayer and government set to bail out trusts that have fallen into the red.

Individual patients are unlikely to notice a dip in their quality of care because hospitals have repeatedly stressed patient care is their top priority.

But as resources become scarcer some hospitals may make changes to services which can affect certain patients. Mark Dayan (pictured), policy and public affairs analyst at national health research charity Nuffield Trust, said there was nothing unusual about hospitals predicting deficits in the current NHS climate, but added the bill would be picked up by the taxpayer and/or Department of Health.

When asked why the financial performance of trusts is deteriorating, Mr Dayan said the tariff used by government regulator Monitor, which sets out the amount of money hospitals receive for patient-activity, has been kept to a low level.

'This is because the government wants hospitals to be more efficient,' Mr Dayan said.

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'Another reason is that hospitals have been ordered to provide more staff on wards for safety reasons following the Francis Report (published in 2013 after failings were exposed at the Mid-Staffordshire NHS Foundation Trust).

'This has caused hospitals to hire more temporary staff which are expensive.'

Mr Dayan said there are several ways in which hospitals can be bailed out for their deficits.

With most clinical commissioning groups (the bodies responsible for healthcare in each area) planning to end the year with a profit, it is likely that some of this money will be used by NHS England (which is in charge of the CCGs) to plug the gap in hospitals' finances.

But if this is not enough then the Department of Health may use some of its capital funds (money originally planned for expanding NHS infrastructure) to balance the books, an outcome which concerns the Nuffield Trust.

'The problem is that this money will be used to solve short-term problems when it is needed for future planning,' he said.

'While the NHS is facing its worst financial situation for at least a decade, it is the longer-term issues which are the biggest concern to us.'

The government announced in December a £1.8bn fund to help trusts become financially stable again as part of its £10bn injection by 2020.

But the money will only be allocated to hospitals as long as they meet strict conditions set by the government as it seeks to create what it calls a 'seven-day NHS service'.

The conditions include trusts reducing temporary staffing spend, setting out plans to hit A&E and treatment waiting time targets, and making savings in other areas.

•Norfolk & Norwich Hospital

Bosses at Norfolk's biggest health trust are in talks with CCGs over the financial consequences of key missed targets in A&E, cancer, and non-emergency treatment waiting times.

Norfolk and Norwich

University Hospital (N&N) is predicting a £9.5m deficit by next April, but that could rise if the trust continues to miss targets and is subsequently fined by the CCGs.

In November the trust was told it could be forced to pay up to £8m in fines.

But while CCGs acknowledge there are few benefits to further stripping trusts of much-needed money, they are themselves under increasing pressure from NHS England to collect the fines.

N&N ended last year with a £9.6m deficit, after originally planning to finish £14.9m in the red.

Its overall cash balance last March was £74.1m. But N&N also has to grapple with its Private Finance Initiative (PFI) debt, which was incurred when the hospital was built at its Colney site.

A spokesman said: 'We are on target to hit this year's financial plan, subject to additional external costs.

'We are still in negotiations with commissioners over fines for missing targets.'

•James Paget Hospital, Gorleston

Uncertainty shrouds the financial outcome this year for James Paget University Hospital as the trust has announced it is revising its predicted deficit.

The trust had originally set a deficit of £4.9m but this could change due to negotiations with Great Yarmouth and Waveney Clinical Commissioning Group. The trust has not said whether the expected deficit would be higher or lower.

It comes as the trust was £626,000 behind its financial plan by the end of October. A spokesman for the trust said: 'There are several key factors including increased demand and increased cost pressures such as pay inflation, increments, and the anticipated outcome of contract negotiations.

'Negotiations are still ongoing and we are working with our commissioner to resolve this.' In the previous two years the trust has delivered surpluses, £300,000 in 2014/15 and £1.2m in 2013/14. If the trust ends this year with a deficit, it will be the first time in its history to do so.

•Queen Elizabeth Hospital, King's Lynn

The largest planned deficit this year is at Queen Elizabeth Hospital King's Lynn (QEH), where finance bosses are staring at a £13.9m black hole.

It follows a £14.9m deficit last year.

The trust wants to reduce its expected deficit to £13.3m to satisfy health regulator Monitor, but deputy director of finance Russell Pearson has said 'there is a strong likelihood the deficit will be nearer £13.9m'.

And even that target will be difficult to hit as the trust grapples with the increased pressure brought by the ensuing winter months.

In his latest report to the QEH board Mr Pearson said: 'Winter pressures are setting in with difficulties in maintaining patient flow, elective (non-emergency) services cancelled, and ambulances queueing at

A&E.'

He said there had been incidents of norovirus had forced closures of wards and added 'patient experience is not currently meeting the standards the trust aspires

to.'