Local Democracy Weekly: Sabotaged health finances and unpredictable deficit targets

“Frankly it sabotaged our performance,” was how Dr Peter Reading described a problem Northern Lincolnshire and Goole Foundation Trust’s finances, which means it will continue to operate under financial special measures for the next year.

The chief executive of the trust running Scunthorpe and Grimsby Hospitals had put faith in a positive financial performance and predicted that it would leave special measures.

However, an “unsophisticated” plan to reduce the trust’s staffing costs left bosses £20 million above its overspend and, ultimately, missing Dr Reading’s 2019 exit target.

It’s the same old story for the region’s hospital trusts. Constantly battling performance targets, while also keeping an eye on the balance sheet.


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United Lincolnshire Hospitals Trust, which is also in financial special measures, has set itself a £71 million deficit for this year.

If it reaches the target, officials said it will give the trust access to funding to reduce the overspend to £41 million.

Dr Peter Reading, chief executive of Northern Lincolnshire and Goole NHS Foundation Trust. Picture: Calvin Robinson.

But, as with NLaG, the organisation will need to tackle its workforce costs.

Dr Reading said last year that hospitals in the north of the county were heavily reliant on agency staff, which ultimately led to a fall in performance.

At ULHT, Paul Matthew, director of finance, said a reduction in workforce costs will be one of the measures used to reduce the trust’s deficit.

Lincoln County Hospital. Photo: Steve Smailes for The Lincolnite

Mr Matthew said the organisation also wants to deliver £18 million worth of savings.

The trust is currently running a deficit of around £26 million, according to October board papers, which is £3 million over its target for this month.

There’s a long way to go until April, but bosses at ULHT will want to replicate last year’s balance sheet when they met an £88 million overspend.

As for NLaG, the organisation has been set a five-year target by government to reduce its deficit to £32 million.

Dr Reading described the figure as “realistic”, but a lot can change in five years.


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