29.11.12
PFI trust’s ‘poor financial management’ – NAO
Peterborough and Stamford Hospitals NHS Trust failed to recognise that a PFI scheme in 2007 to build Peterborough City Hospital would incur “considerable” financial strain for years to come.
A new report by the National Audit Office (NAO) stated that the trust could not afford the scheme at the time and the Board failed to monitor other changes affecting its income and costs between 2007 and 2011. The trust faced a very large, recurrent deficit, and the Department of Health was not sceptical enough about its affordability.
In 2011-12 the trust’s in-year deficit was £46m and it is currently predicted to be over £50m for 2012-13.
The amount of healthcare activity undertaken has also been greater than envisaged in the PFI business case, which assumed a 14% drop in outpatient activity. In fact this activity has increased by 21%.
Amyas Morse, head of the National Audit Office, said: “The Trust Board’s poor financial management and procurement of an unaffordable PFI scheme have left the Trust in a critical financial position.
“The Board developed and enthusiastically supported an unrealistic business case built on over-optimistic financial projections. The regulatory and approval processes did not work in this case and did not ensure affordability.
“Irrespective of how far the PFI scheme contributed to the current deficit, the latter is now too great for the Trust to balance its finances by managing its own resources. The Trust, the Department, Commissioners and Monitor need to work together and take urgent action to help the Trust get back on its feet.”
A report produced by KPMG and commissioned by Monitor into the financial troubles at the trust is at www.monitor-nhsft.gov.uk/sites/default/files/Peterborough%20Report%2026%20June%202012.pdf
(Image, courtesy PSHFT, shows the new Peterborough City Hospital when it was under construction)
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