“THERE is no Plan B”.
That’s the stark message to health chiefs at Worcestershire Acute Hospitals NHS Trust if it cannot re-negotiate the terms of a £42.4million loan due for repayment to the Department of Health and Social Care (DHSC).
It’s highlighted in red in a Corporate Risk Report to the board of WAHT to be considered by Trust leaders this Thursday, January 10.
The report reveals that 15 months ago the Trust, which provides acute health care services at Worcestershire Royal, the Alexandra and Kidderminster General Hospitals was facing an eye watering accumulated deficit of £199.6million.
It’s a debt that has been growing steadily since it went £14.2million into the red in the financial year 2013-14.
The debt mountain has ballooned in large part due to the Trust’s failure, under the NHS internal market system, to generate enough income from its services to stay in the black.
This has made it reliant on loans from the DHSC to tide it over.
However the DHSC is now calling in those loans.
Standing at £194.8m, the Trust has to find £42.4m for repayment to the DHSC by the end of the March this year, 2019, £72.4m for financial year 2019-20, £60.8m for 2020/21 with the rest spread out until 2037/38.
All this while finance chiefs are saying that at its current rate of performance WAHT is looking at a debt of £72m alone for the financial year 2018-19.
The Trust has found itself in a perfect storm of financial problems.
It has put on extra beds but has been battered by rising staff costs, particularly for bank nurses while suffering delays in its surgeon recruitment programme which has hit the amount of money it can earn from its operating theatres and treatment centres.
As a result the Trust continues to require cash support to maintain services; by the end of November 2018 it had already received £39.2m in revenue loans and £6.3m in capital loans just to keep going.
The report also reveals the Trust is averaging 241 days to repay non-NHS debts and 123 days for NHS debt on a target of 30 days.
It concludes: “There isn’t a plan B for repayment of loans due this year, if the DHSC will not agree to re-financing”.
A spokesperson for Worcestershire Acute Hospitals NHS Trust said: “In line with many Trusts we have faced significant challenges to break even each year, resulting in the Trust requiring loans from the Department of Health and Social Care.
“A number of measures are in place to ensure we meet our financial plan and agreed deficit for 2018/19.
“Our Medium Term Financial Strategy, which is in development, will set out the measures the Trust will take to achieve a break even position in the next five years. We are awaiting national guidance on the re-financing of current loans.”