The chief executive of the trust which runs Scunthorpe and Grimsby Hospitals said the organisation will not leave financial special measures this year, despite setting an exit target for 2019.
Dr Peter Reading, who runs Northern Lincolnshire and Goole NHS Foundation Trust (NLaG) and set the target last year, said the trust ran into “serious underlying problems” with its finances which hampered its performance in 2018/19.
NLaG was placed in financial special measures by regulator NHS Improvement back in March 2017 following “significant pressure” on its services and an increasing deficit.
Last year, the trust missed its overspend target by £20 million due to staffing costs and “unexpected expenditure”.
Dr Reading admitted that the work done by the organisation to try and manage its staffing costs was “not as sophisticated as it should have been”.
He added that it was “unwise” to set the target for the organisation to leave financial special measures this year.
“I don’t think we will get out by the end of 2019,” he said.
“The reason for that is very sadly we discovered some serious underlying problems in our finances which had not been fully exposed.
“They came to light around Christmas time and, to be honest, they sabotaged our financial performance at the end of last year. We went down quite badly right at the end of the year.”
The trust has since been tasked by the Department of Health and Social Care to reach a deficit of £32 million in the next five years.
It currently has an underlying overspend of £51 million forecast for this year.
Dr Reading said the new targets are “achievable” and it recognised that the trust has structural costs that will “never be eliminated”.
He added that the government’s plan reflected that the trust is “always going to have quite a substantial deficit”.
“I believe it is a realistic target,” he said.
“We’re going to have to work hard and it’s not going to be easy. We’re still going to have to achieve an efficiency target every year which is higher than in trusts that are more stable in their finances.
“It’s going to be tough, but I believe the way that we are organising things now, the way we are mobilising this organisation and in the way we are working with our partners across the region is so much stronger that I believe it is realistic for us to achieve that.”
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