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Debt-ridden East Kent Hospitals Trust ‘running out of cash’

A debt-ridden hospital trust that serves 700,000 people is on the brink of “running out of cash” prompting concerns over primary care.

East Kent Hospitals Foundation Trust haemorrhaged £8.4m more than forecasters predicted, just four months into the financial year.

CHEK campaigners Peggy Pryer. Picture: Chris Davey FM4965637.
CHEK campaigners Peggy Pryer. Picture: Chris Davey FM4965637.

It means the organisation, which runs hospitals in Canterbury, Dover, Ashford, Margate, and Folkestone, has this year accumulated a £39 million black hole.

The revelation prompted fears hospital care standards could slip, with a former nurse likening the current quality to a developing country’s.

A trust director revealed the dire financial straits in a board meeting on Thursday (September 7).

Richard Oirschot, a non-executive, told board members: “The trust’s deficit of £39 million in the first 4 months is some £8.4m worse than the planned deficit of £30.6m.

“As a result of the current adverse performance and lack of progress on the trust improvement programme delivery for 2023 - 2024, the financial plan for a deficit of £72m this year looks extremely challenging.”

Kent and Canterbury Hospital, Ethelbert Road, Canterbury.Picture: Barry Goodwin
Kent and Canterbury Hospital, Ethelbert Road, Canterbury.Picture: Barry Goodwin

He continued: “The trust is likely to run out of cash by the end of November, unless revised forecasts are agreed with NHS England or performance changes dramatically.”

The report explains the organisation lost money to strikes, agency staff costs, and failure to deliver planned savings.

Former nurse Peggy Pryer, who spent decades caring for families before becoming a healthcare campaigner, argues poor financial management is “already having an effect on services.”

Explaining the trust employs significant numbers of agency staff, she said: “I’m extremely concerned about the safe staffing levels.”

“I have been a patient - last summer I went to William Harvey, it was absolutely horrendous.

“I cannot believe it, it was like being in some other third-world country.”

Ashford’s William Harvey
Ashford’s William Harvey

She also suggested the cost of senior management may be a contributing factor to the deficit.

“We’ve got all these directors – you look at the salaries of those directors sitting round that table, and you see the pittance that people are working for on the shop floor of direct patient care,” she said.

The trust has previously been placed in special measures from 2014 - 2017.

At its last overall inspection by the Care Quality Commission in 2021, East Kent Hospitals trust was rated “requires improvement.”

Speaking after the meeting, Damian Green, MP for Ashford, told the Local Democracy Reporting Service (LDRS): “I am naturally concerned about the trust’s financial position, and have been in touch with them about it.

Buckland Hospital
Buckland Hospital

“My main concern is that the necessary measures which the trust is taking to bring the deficit down do not in any way affect patient safety.

“As an example, reducing reliance on agency staff provides greater continuity of care while saving the trust money.

“I hope to see them bring measures like this to stabilise their finances.”

MP for Canterbury, Rosie Duffield, added: “In my view, we need to reform health and care services to build an NHS fit for the future, with a fully costed workforce plan that will alleviate pressures on existing staff and improve patient care.

“This is part of a ten-year plan for change and modernisation to deliver higher standards, speed up treatment, focus on prevention, and harness life sciences and technology to reduce preventable illness and cut health inequalities.”

The trust stressed that an NHS body cannot run out of money to the point of being unable to pay staff or run services.

Margate’s QEQM
Margate’s QEQM

Instead, when cash dries up, its budget has to be reforecasted through a process called the National Protocol, in consort with NHS England, and new money made available.

Michelle Stevens, Chief Finance Officer for the trust, said: “Our current financial forecast for this year is higher than planned.

“To mitigate this, a number of changes have been made that will enable us to improve our productivity and improve our financial position.

“These measures include stricter controls on recruitment to non-clinical jobs, reducing our use of agency clinical staff significantly by recruiting permanent staff and introducing an investment oversight group to sign off any expensive purchases other than drug or essential equipment supplies.

“We are already working with the Integrated care board and partner organisations as part of the national planning process to ensure there is no impact on patient care.”

In 2012 the South London NHS Healthcare Trust - which ran three hospitals in Greenwich, Bexley and Bromley - was scrapped in the face of financial woes.

The trust was placed in administration after accumulating debts of almost £150 million, losing about £1m a week, and it was carved up between other NHS bodies and private companies.

It's rare for NHS trusts to fall into such a state, but when in especially dire financial straits they can be placed into administration, special measures, or scrapped and their functions taken up by other NHS bodies instead.

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