Report finds Peterborough and Stamford Hospitals Trust is ‘financially unsustainable’

An independent report says the trust which runs Stamford Hospital is “financially unsustainable” after taking out a private finance deal.

Health watchdog Monitor published a report today (Friday) into Peterborough and Stamford Hospitals Trust, which runs Peterborough City Hospital and Stamford Hospital, after it sent a contingency planning team to examine the decision-making process that approved the private finance initiative that paved the way for the construction of Peterborough City Hospital at a cost of £289m.

The hospital opened in December 2010.

It followed hard-hitting criticism from a committee of MPs about the deal which has saddled the hospital with repayments of £40 million a year for the next 30 years.

Peterborough City Hospital would struggle to pay its bills for wages and supplies if it was not getting cash support from the Department of Health, according to the report.

Monitor’s contingency planning team has just published their first report into the financial health of the trust and will follow it up in the near future with proposals for a solution.

A spokesman said: “The contingency planning team has found Peterborough and Stamford Hospitals Trust is financially unsustainable in its current form.

“The team has found the trust is clinically and operationally sustainable. In the team’s opinion clinical quality of patient care is appropriate and, on the whole, within expected performance levels.”

The report added: “However, the trust built up a deficit of £37m the end of 2012-13, and needed one-off support from the Department of Health of £44.1m.

“The trust’s forecasts for the next five years show a continuing deficit of £38m or more each year, and a cash shortfall of at least £40m a year.

“If there were no further support from the Department of Health, the trust would not be able to pay its bills (such as for wages and supplies) as they fall due.”

Inspectors said Peterborough City Hospital was being under-utilised at a cost of £22m a year. They said if three additional wards were opened on the hospital’s fourth floor an extra £9m per year could be made.

The trust’s interim chief executive Dr Peter Reading said: “This is a very useful report which confirms that our hospitals provide good quality care and, today, are properly run.

“This is reassuring for our patients and testament to the skill, hard work and efforts that our staff put in every day.

“The report also confirms that the financial challenge we face remains perhaps the biggest in the NHS, and that while part of the solution – ever greater efficiency – is in our own hands, more than half of the problem can only be tackled by broader measures across the local health economy and wider NHS.

“I would like to assure patients that day-to-day life in our hospitals in both Peterborough and Stamford continues as normal.

“Our twin priorities remain – delivering the very best patient care, day in, day out, and finding a further £13m in cost improvement savings over the course of this financial year.”

The trust put plans to redevelop Stamford Hospital into a health campus on hold while the review was carried out.

Stamford and Bourne MP Nick Boles said this week he feared the cash crisis facing the trust could lead to the closure of Stamford Hospital.

He wrote to NHS chief executive Sir David Nicholson and Monitor on Wednesday issuing an ultimatum: guarantee the trust can carry out its plans for Stamford Hospital or hand it over to another trust.

Monitor’s contingency planning team has just published their first report into the financial health of the trust and will follow it up in the near future with proposals for a solution.

The report can be seen here