While the NHS waits for the promised extra money, GWH is facing a significant overspend

Billions of extra pounds – some recycled, most new – have been promised by the government for the NHS.  It is still very far from clear how and when this money will reach front line services – or how soon it can solve staff shortages.

In the meantime, the NHS is struggling on dogged by the years and years of underfunding in the face of a growing and ageing population.  With figures up to  month four of the financial year, the board of Great Western Hospitals NHS Foundation Trust (GWH) was told about its growing deficit and plans to overcome it.

July’s deficit was £1,316,000 – which is £1,419,000 worse than that month’s figure in hospital’s financial plan for 2019-2020.  It is thought likely this would lead to a deficit over the financial year of some £13million – a prospect described as ‘significantly adverse’. 

In addition to the annual savings programme (known as CIPs – and not yet making its expected savings), a financial recovery plan is now in place with targeted savings of £7.6million. But there are many risks on the bumpy road to April 2020.

Among the problems are rent invoices from the (fairly) new NHS Property Services Ltd (PropCo -set up under the coalition reorganisation and gifted much of the NHS’ real estate).  They have invoiced GWH for £164,000. 

GWH has taken these costs to their Clinical Commissioning Groups on the grounds that the tariff by which hospitals are paid did not include PropCo’s rental charges which they have decided to set in line with market prices.  This is another of the ways the Treasury and Department of Health give with one hand and take back with another.

Coming soon will be the new doctors’ pay settlement which carries a risk which is put at a 75 per cent likelihood.  This could set GWH’s finances back by £525,000 or more – unless the settlement comes with financial support from the government.

Plans to sort out the backlog of people waiting for treatment – the Referral to Treatment targets – would if fully implemented cost between £1,829,000 and £2,613,000. 

And then there is the underlying risk of a bad year for influenza – a risk that could become a significant cost if the evidence from Australia’s winter flu season is to be believed.

The NHS staffing crisis has not suddenly vanished amid the heap of new money.  And it is still hitting GWH quite hard.  Among the risks to improving their financial position by April 2020 is the cost of agency staff to fill vacancies and keep patients safe.

The full extent of this risk could be another £1,215,000 – but it is rated at a 50 per cent likelihood so could drop to £608,000.

The bill for agency staff in July showed an overspend of £234,900 against GWH’s financial plan for the year, and an overspend of £120,300 more than for July 2018.  The year-to-date overspend for agency staff is £656,900.

Hospital finance departments do not have an easy row to hoe.  For example, GWH was told that nationally money was so short it would have to re-submit its capital budget for the year – minus 20 per cent. 

They ‘reluctantly’ re-worked the budget and re-submitted it.  Only to be told money had suddenly been found, so they could put the 20 per cent back again.  But it all has to be spent by April 2020.

The most obvious sign of the increased demand on GWH is the growth in the number of people arriving at its Emergency Department (ED – otherwise known as  A&E).   At the end of 2018/19 attendances were 13.4 per cent higher than the previous year.

GWH is trialling ways to cope with this including what is termed ‘reverse streaming’.  This involves some people being sent from ED to the Urgent Care Centre and then ‘reverse streaming’ them back to ED if their condition needs further attention.

The agreed – and obviously essential – enlargement of the ED at GWH has been signed off in principle, but will take many, many months to build, fit out and staff.

Also on the board’s agenda was a ‘Brexit update’ presentation.  This item was not taken as the presentation was being rewritten – in the light, no doubt, of the Cummings and goings at Westminster.  It will reappear on October’s agenda.