Yorkshire hospital trust facing £38million deficit after finance blackhole uncovered

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An investigation into the growing deficit at a Yorkshire hospital trust has revealed that it expects to be £38.4million in the red by the end of this month.

The revelation comes as part of an independent report into the accounts of Doncaster and Bassetlaw Hospitals NHS Foundation Trust (DBH) after a shock multi-million pound blackhole in its finances was discovered last year.

Health care regulator Monitor yesterday announced its intention to “support” the trust by implementing a series of steps to improve its finances over the coming months but maintained it may take further action.

The trust had been forecasting an end of year surplus of £2m until October last year when it emerged that bank accounts held significantly less cash than had been reported.

Hospital bosses say the trust is currently posting a revised year-to-date deficit of £29.5m, which is likely to grow by almost a third by the end of the financial year.

The report by finance firm KPMG found that a “small number of individuals from the senior finance team” at the trust “played some part in the misreporting”, prompting disciplinary action.

Mike Pinkerton, chief executive of DBH, said: “We have been working closely with our regulator, Monitor, since discovering the misreporting of the financial position in October and have greatly appreciated the support and advice they have given to us.

“Once the financial misreporting was identified it became clear that as a trust we were spending more than we were earning on a monthly basis. To address this we have put plans in place to regain control of our finances and strategic direction. This included establishing a team dedicated to the financial turnaround of the organisation that will focus on key tasks to deliver savings, without compromising our commitment to quality.”

He added that in recent years “the trust has made excellent improvements in the quality of care we provide to our patients across the trust, albeit spending more money than we should have”.

It is thought that overspending at the trust began before the start of this financial year, with the accounts for 2014-15 being grossly misstated.

Paul Chandler, regional director at Monitor, said: “We recognise the financial challenges faced by Doncaster and Bassetlaw Hospitals and will offer expert advice and guidance to help the trust turn its finances around.

“We will work closely with the trust to help it improve its financial position so it can continue to provide quality care to patients in the long term.

“It’s good to see that the trust has been very receptive to our support and has worked with us closely on agreeing next steps.”

In December officials warned that cuts of 10 per cent will be needed to curb runaway expenditure including significant overspending on temporary doctors and nurses, with even bills for postage said to be £370,000 over budget since April.

Action already appears to have been taken to make savings. Patients and visitors to the trust’s main hospital sites, including Doncaster Royal Infirmary, Bassetlaw Hospital and Montagu Hospital will face increased parking charges from April although some concessions will remain. Staff parking charges will also increase from March 1.

DBH director of strategy and improvement, Dawn Jarvis, said that the move was one of many “tough decisions” being made but suggested that the changes to parking charges would bring the trust in line with other hospitals in the region.