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Scarborough health trust could be starting the new financial year £2 million in the red after a struggle to meet a loan repayment target.

Finance chiefs say they can only hit their savings target of £1.89 million in this financial year by using money given to the health trust by the Government to build a new 28-bed ward at Scarborough Hospital.

Bosses at the Scarborough and North East Yorkshire NHS Healthcare Trust need to make the savings to meet the second annual repayment of a loan from the Department of Health.

The Strategic Health Authority threw the cash-strapped hospital trust a lifeline in 2007 by suspending its historic debt of £20.7 million.

However, hospital bosses still needed to make in-year savings of £10.5 million to balance their books, and the NHS stepped in with a £7.6 million loan - it’s this loan which finance chiefs say is proving difficult to repay.

Acting finance director Richard Mellor said: “We have had significant operational pressures in December which have impacted on our financial position.”

Mr Mellor says that costs were particularly high in areas such as medical staffing and drugs. He also told a meeting of the trust board that £42,000 had been spent on replacing old mattresses.

He said: “We have closed a gap from where we were in the previous month, but we still have risk between now and the end of the year.”

Mr Mellor told the Evening News that the Strategic Health Authority had agreed to let the trust use around £2.1 million of the new ward funding to support its financial position.

Around £1 million of this will be coming through between now and the end of March, which means the trust has to find around £300,000 in additional savings by the end of the financial year.

But it also means that the trust will start the new financial year having to recoup the £2.1 million for the ward.

Mr Mellor explained this should be achievable as the trust’s total budget is around £110 million a year and various cost improvement plans were still in place.

However, during the meeting concerns were raised about the effectiveness of cost improvement plans and the ongoing expense of agency staffing costs.

Trust board chairman Sir Michael Carlisle said: “The whole of the NHS is looking ahead at a very difficult position in the national economic context.

“It does bother me that if we’re not careful our ability to keep going with recurrent cost improvement programmes will be very difficult.”

He added that the trust had spent around £250,000 in December alone on agency medical staff, which was a major concern.

Jayne Adamson, director of human resources, said they were looking at the issue but there was “no fix in the short term.”

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Cash for ward may be used to pay loan

Scarborough health trust could be starting the new financial year £2 million in the red after a struggle to meet a loan repayment target. Finance chiefs say they can only hit their savings target of £1.89 million in this financial year by using money given to the health trust by the Government to build a new 28-bed ward at Scarborough Hospital. Bosses at the Scarborough and North East Yorkshire NHS Healthcare Trust need to make the savings to meet the second annual repayment of a loan from the Department of Health. The Strategic Health Authority threw the cash-strapped hospital trust a lifeline in 2007 by suspending its historic debt of £20.7 million. However, hospital bosses still needed to make in-year savings of £10.5 million to balance their books, and the NHS stepped in with a £7.6 million loan - it’s this loan which finance chiefs say is proving difficult to repay. Acting finance director Richard Mellor said: “We have had significant operational pressures in December which have impacted on our financial position.” Mr Mellor says that costs were particularly high in areas such as medical staffing and drugs. He also told a meeting of the trust board that £42,000 had been spent on replacing old mattresses. He said: “We have closed a gap from where we were in the previous month, but we still have risk between now and the end of the year.” Mr Mellor told the Evening News that the Strategic Health Authority had agreed to let the trust use around £2.1 million of the new ward funding to support its financial position. Around £1 million of this will be coming through between now and the end of March, which means the trust has to find around £300,000 in additional savings by the end of the financial year. But it also means that the trust will start the new financial year having to recoup the £2.1 million for the ward. Mr Mellor explained this should be achievable as the trust’s total budget is around £110 million a year and various cost improvement plans were still in place. However, during the meeting concerns were raised about the effectiveness of cost improvement plans and the ongoing expense of agency staffing costs. Trust board chairman Sir Michael Carlisle said: “The whole of the NHS is looking ahead at a very difficult position in the national economic context. “It does bother me that if we’re not careful our ability to keep going with recurrent cost improvement programmes will be very difficult.” He added that the trust had spent around £250,000 in December alone on agency medical staff, which was a major concern. Jayne Adamson, director of human resources, said they were looking at the issue but there was “no fix in the short term.”



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