£47m bailout as hospital struggles to pay its bills
Last updated at 12:14, Thursday, 29 May 2014
AN eye-watering £47 million bailout to pay overdue bills, repay loans and replace critical medical equipment has been made to the trust which runs the West Cumberland Hospital.
The financial crisis dogging the North Cumbria Trust is so bad that suppliers were threatening legal action over unpaid bills – with one utilities firm even threatening to cut off supply to the Whitehaven site.
Questions are now being asked as to why problems have been allowed to become so severe.
The true extent of the financial plight was revealed after the trust issued a plea for help to the Department of Health.
It revealed key pieces of medical equipment also required immediate replacement – including defibrillators, incubators, breast screening equipment and anaesthetic machines.
In total, the troubled North Cumbria University Hospitals NHS Trust – currently in special measures – asked for £46.981m from the Independent Trust Finance Facility, part of the Department of Health.
The figure, more than a fifth of the trust’s £225m annual turnover, was made up of:
n £30.5m to pay off the trust’s current deficit;
n £7.4m to pay overdue bills;
n £4.981m to replace aging medical equipment deemed to be high risk;
n £4.1m to meet payments on Carlisle’s PFI hospitals and three existing loans.
To secure the money trust bosses set out the full extent of problems facing the West Cumberland Hospital and the Cumberland Infirmary, Carlisle.
Finance director Steve Shanahan submitted the bid, which has since been approved, in February.
In it, he said: “It is currently so far behind paying suppliers that an increasing number are putting the trust’s accounts on hold and withholding deliveries until urgent payments are made to them. Many suppliers are threatening and taking legal action. One utilities company has also threatened to cut off supply to the West Cumberland Hospital due to non-payment.”
He added that the trust’s accounts team were spending most of their working day dealing with calls chasing payments, while other senior managers up to director level were having to field calls and emails from unhappy suppliers.
When it came to medical equipment, it was stressed that many of the items were identified as high risk by inspectors during the Keogh Review.
Mr Shanahan warned: “Without significant investment, within the next 12 months, more than 70 per cent of the medical equipment will be beyond its expected life.
“There are significant mixes of manufacturers and models which leads to more difficult training delivery and the risk of clinical errors due to differing operational procedures.”
He added that technicians were spending more than half their time on repairing equipment, rather than on planned maintenance and testing.
Other items on the priority list include dialysis equipment, mobile X-ray machines, mortuary tables, trolleys to transport patients to theatre and maternity ventilators. The wider finances of the trust were also set out, revealing it took out a £12m loan in 2007 to cover its end-of-year deficit, but then had to take out subsequent loans when it could not meet repayments
Copeland MP Jamie Reed said it should never have been allowed to get this bad.
“I’ve repeatedly called for the trust to be helped financially. I wrote to Jeremy Hunt seeking this bailout months ago and he refused to help. It says something about government policy when the trust has to be driven to the edge of bankruptcy before it will act,” he said.
Estephanie Dunn, operational manager for the Royal College of Nursing’s Northern Region, said: “This additional £47m will address some of the historic pressures. But we would question how the trust will manage income and expenditure, including the cost of the PFI, to make sure they do not find themselves back in this position again.”
A trust spokeswoman stressed the “issue regarding the power supply at West Cumberland Hospital was quickly resolved and did not impact on patient care.”
Mr Shanahan said the money had allowed the trust to deal with immediate cash flow issues and replace key pieces of medical equipment.
First published at 11:50, Thursday, 29 May 2014
Published by http://www.whitehavennews.co.uk
Have your say
FAO Jamie Reed.Did you not know your lot saddle North Cumbria University Hospitals Trust with over Â£540 million of PFI payments over 30 years?Then read this... http://www.whitehavennews.co.uk/news/health/hospital-pfi-scheme-is-crippling-us-says-trust-1.882561?referrerPath=newsAlso read this...http://www.hsj.co.uk/news/finance/trust-loses-confidence-in-pfi-provider/5067991.article
Jamie Reed should remember his Prime minister Tony Blair hailing the PFI as the model of success and future for the NHS
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