Trust expects to miss control total deficit by £30m

East Sussex Healthcare Trust is now forecasting a deficit of £56.1m, after receiving sustainability and transformation funds, nearly £30m worse than its plan of £26.5m. Its pre-STF deficit is expected to be £57.4m against a control total of £36.4m. The trust expects its income in the year to be £383m – meaning the deficit is worth just under 15 per cent of income.

The trust’s financial position deteriorated in December with a £7m in-month deficit – more than four times as much as planned – making the year to date deficit £39.4m.

In a report to the board, finance director Jonathan Reid said the reforecast had been shared with NHS Improvement as part of the trust’s financial special measures process.

He added there were several main factors for the increased deficit. An ambitious cost improvement programme is likely to fall £6m short of a £28.4m total, while the trust has also seen cost pressures for medicines and clinical equipment – as well as spending more than planned on temporary staff and programme support teams.

East Sussex has also undertaken less elective activity than planned, but without any associated reduction in costs. A number of disputes with commissioners – some of which the trust says were historic – have recently been settled through mediation by NHS England and NHS Improvement, reducing the trust’s income by £9.8m.

The trust was paid some STF funding for the first quarter of 2017-18 but is not eligible for any for the remaining quarters as it has not met its control total – depriving it of an additional £8.6m.

Mr Reid said: “In 2017-18 the trust will not achieve its financial plan. The strong progress which has been made in quality, safety and operational performance needs to be matched by an improvement in financial delivery.”

HSJ reported in November that the East Sussex health economy had a “system risk” of £80m with both commissioners and the main acute provider seeing finances deteriorate.