06 January 2006
News of the health service's financial troubles continue to emerge as one trust predicted it could face a cumulative deficit of £100m by March 2009.
A public interest report issued by external auditor PricewaterhouseCoopers said London's Queen Elizabeth Hospital Trust was predicting a cumulative deficit of £28.9m by the end of the financial year.
A recovery plan aims to achieve break-even from 2007/08 but resource accounting and budgeting (RAB) will mean the trust's cumulative deficit will continue to rise and could reach £99.8m in three years.
Under RAB, funding for local health economies is cut by the same amount as the previous year's overspend, and South East London Strategic Health Authority passes this on to each body that incurred a deficit. The auditors said this made it difficult for the trust to eradicate its cumulative deficit.
The trust admitted that in commercial terms it was insolvent and did not expect to recover financial balance without help.
'The principal cause of the trust's current financial difficulties is the high fixed costs of its Private Finance Initiative scheme. The trust has improved its efficiency significantly since 2001 and, excluding the excess PFI costs, is efficient relative to other hospitals,' it added.
The district auditor issued a public interest report on Cambridge City and South Cambridgeshire primary care trusts, which are predicting overspends of £10.6m and £7.6m respectively this year.
Financial problems have emerged at another renowned trust. Oxford Radcliffe Trust said it had stopped performing cardiac catheter ablation surgery to help balance its books. Under payment by results, its costs were £2,000 higher per patient than the standard tariff.
Monitor said foundation trusts had a net deficit of £2m in the first six months of this financial year.
PFjan2006
