Axe will fall if Peterborough NHS trust fails to solve crisis

Nigel Hards, chairman of Peterborough and Stamford NHS Foundation Trust. Picture: Ben Davis/Peterborough ET
Nigel Hards, chairman of Peterborough and Stamford NHS Foundation Trust. Picture: Ben Davis/Peterborough ET
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EXECUTIVES at Peterborough’s cash-strapped hospital trust face being axed unless they can recover its ailing financial fortunes.

Peterborough and Stamford Hospitals NHS Foundation Trust chairman Nigel Hards admitted that his board cannot fail to achieve their planned budget savings, following a scathing report issued by trust regulator Monitor this week.

Monitor criticised the trust for still not having an approved Turnaround Plan in place despite being aware of the stark financial situation for at least a year, as well as failing to accurately predict the cost of moving into the £289 million Peterborough City Hospital, which opened last November.

The Evening Telegraph can reveal, trust chiefs based their financial projections for the move into the super hospital primarily on plans drawn up in 2005/06, before the public sector financial crisis hit.

This has resulted in the trust projecting a £38 million deficit by March 2012, not helped by the £35 million it must re-pay in Private Finance Initiative (PFI) payments for the building of the hospital.

In a frank interview with the ET yesterday, Mr Hards said that Monitor will almost certainly intervene and make changes at board level, not least in his own position, unless the savings plan currently being discussed is successful.

He said: “I have said to you before and I’ll say it again there are two reasons why I won’t be here in the future. One is if anybody makes us roll out efficiencies that would damage patient care, you won’t see me here if that happens.

“But the second reason I won’t be here is if we fail to position ourselves well and achieve the Turnaround Plan, in which case I will be forced out by the regulator. I do not intend to give them that opportunity.”

Mr Hards admitted that mistakes had been made in failing to fully realise the true cost impact of moving into the super hospital, but refused to apologise for making the move when they did.

It follows criticism from Monitor that the trust predicted that during the 2010/11 financial year it would have a Financial Risk Rating of 3 in 2011/12, only to then change this to a rating of 1, the worst, come the start of this financial year.

Mr Hards added: “It was based on beliefs in the plan written before the move into the new hospital. The written plan believed the inefficiencies that could be driven out by the move to a single site would all materialise, but in hindsight we realise that this was clearly not going to be the case.

“I think I would prefer to say the trust was using information it believed was right, but it turned out to be wrong. The original plan was written in 2005/06 with marginal adjustments to it as it went along.

“It’s easy to be clever looking back, but there was no reason to believe otherwise, let’s also not lose sight of the fact the move went incredibly well.

“We moved all of our patients, staff and equipment safely, rather than spending a bit more time locked in a room crunching numbers.

“I’m not going to apologise for that, it was more important that we move everybody over safely rather than re-cranking the numbers. It’s disappointing that this has happened but I’m not going to apologise for it.”

The board will now have to give monthly reports to Monitor, updating it about its progress as it makes the required savings.

The trust has already put together a QIPP (Quality, Innovation, Productivity and Prevention) plan that will save £12 million this financial year, and result in the loss of 300 posts, most of which are at the city hospital.

Monitor also criticised the trust for failing to get its Turnaround Plan in sooner, stating that it wanted it in by June, and if not then September.

Mr Hards said that a draft plan had been submitted in June, which Monitor then responded to with areas to improve.

The reason it was not submitted in September, Mr Hards said, was because the trust thought it had been given an extra month to complete it by Monitor.

He said: “We recognised soon after moving into this building that the original business plan for the new hospital did not stand up to the economics seen at the end of last year and was instead looking forward to the growth that had been occurring in budgets back then.

“We did spot it when we moved in here and I defy anybody who is merging what is essentially three businesses to actually sift out what the relocated running cost is going to be.

“It is great to think we could have spotted it a few weeks earlier and could have got the Turnaround Plan done a few weeks earlier and anyone who knows me will know it’s a criticism that sits heavily on my mind.

“We took time to put together the Turnaround Plan because we did not want to do what happened in 2005/06 which was to write a plan that was only factoring in the good side and hoping it will all go all right on the night.”

Monitor also criticised the lack of stability on the trust board, with chief executive Nik Patten still on long-term sick leave and Louise Barnett in charge for the interim.

A replacement is yet to be appointed after chief operating officer Rowena Barnes’ retirement.

But Mr Hards said the response to an advert for new non-executive directors has been fantastic, with around “eight times” the number of applications usually submitted for such a position on the board.

Monitor’s report

THE following points were made by Monitor in its latest report on Peterborough’s hospitals trust.

- The board has not had a robust recovery plan in place this year despite being aware of the poor financial position and high costs of the PFI contract.

- The board did not quickly address known financial problems, with work on the Turnaround Plan only starting when a Turnaround Director was appointed in March.

- This is despite the trust knowing of the financial problems in 2010, while Monitor had issued a warning as early as 2007.

- In 2010/11, the trust forecast it would have a Financial Risk Rating (FRR) of 3 in 2011/12, only to then report an FRR of 1 - the worst rating - once the financial year started, showing the trust failed to report accurately.

- There are concerns that actions to address the problems are not being addressed under the board’s own initiative, but rather as a result of suggestions made by Monitor.

- A commitment to produce a Turnaround Plan in June 2011 was not met, neither was a September deadline for the plan, which was submitted last week.

- The board failed to ensure that there are sufficient skills in its finance department, which has led to issues over the accuracy of its financial reporting.

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