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Havering NHS chiefs promise improvements as independent finance review finds Queen’s Hospital trust’s £481,000,000 of accumulated historic debt

PUBLISHED: 07:00 27 April 2018 | UPDATED: 15:16 27 April 2018

Queen's Hospital, in Rom Valley Way, Romford, is one of two hospitals operated by BHRUT. Photo: Ken Mears

Queen's Hospital, in Rom Valley Way, Romford, is one of two hospitals operated by BHRUT. Photo: Ken Mears

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Bosses at Havering’s NHS hospital trust have admitted the current state of its finances is “clearly not acceptable”, as a newly released report revealed the organisation is currently operating at a £481million deficit.

King George Hospital, in Goodmayes, is one of the two hospitals BHRUT are responsible for.King George Hospital, in Goodmayes, is one of the two hospitals BHRUT are responsible for.

In October, the Recorder reported that Barking, Havering and Redbridge University Hospitals Trust (BHRUT), which runs Queen’s Hospital in Rom Valley Way, Romford, was forced to apply for a £15million emergency loan from NHS Improvement to help with a sudden cash flow problem.

The trust was then granted a further £5.1m from the NHS in November, and alongside NHS Improvement commissioned an independent review of its finances to be led by London-based audit firm Grant Thornton.

This week, BHRUT – which paid for the Grant Thornton review – published the findings of that review on its website.

According to Grant Thornton’s expert investigators, as of March 2017, the last date for which fully verified figures were available, the trust was operating at an overall accumulated deficit of £481m.

Matthew Hopkins, chief executive of the Barking, Havering and Redbridge University Hospitals NHS Trust.Matthew Hopkins, chief executive of the Barking, Havering and Redbridge University Hospitals NHS Trust.

However, the report did point out that the trust had managed to reduce annual budget deficits – the amount by which total debt has increased each year – from £49.9m in 2012 to £10.9m in 2017.

But auditors did conclude that this year the trust is forecast to run £54.4m over budget.

This is for a number of reasons, including an ongoing dispute with local clinical commissioning groups, a number of suppliers who were paid late threatening legal action, and a large increase in demand for hospital services across Havering, Redbridge and Barking and Dagenham.

Investigators also highlighted several key areas were the trust’s financial management was not up to scratch, such as only having two qualified accountants on the board and not including balance sheets in its regular financial reports.

Auditors even described one mix-up where more than £8m of surgical equipment was suddenly discovered that had not been accounted for on any of the trust’s books.

In a joint statement released alongside the full report, BHRUT chairman Joe Fielder and chief executive Matthew Hopkins said: “The overall cash-flow risk was not high enough on the board’s agenda and the manner in which the cash problem progressively developed, and ultimately unfolded, represented a significant breakdown in financial governance at the trust.

“As you can imagine this report is uncomfortable reading for us as a board and we apologise on the board’s behalf that this situation arose.

“We have been working hard to improve.

“The long delays in paying our suppliers are clearly not acceptable and we’ve been taking steps to improve this situation.

“Specifically we will be ensuring we have more transparency in our financial reporting of debtors and creditors, and our forecasting and management of cash flow.

“We are also completely overhauling our approach to reporting on financial issues, so that the correct information is gathered and scrutinised in the appropriate places – right up to our board.”

But the pair insisted staff across the trust’s two hospitals remained dedicated to keeping patients safe.

They added: “We would like to reassure the public and our patients that we are committed to providing the very best care to our community.

“We would also like to pay tribute to our hard working and dedicated staff, who continue to do a fantastic job in providing care to our community, and we would like to thank our partners, patients and our valued suppliers for their continued support.”

Back in February, NHS Improvement placed BHRUT in financial special measures, meaning that specialist teams, led by an improvement director, are currently overseeing intensive, accelerated action to bring about financial improvement across the trust.

At that time, NHS Improvement chief executive Ian Dalton said : “BHRUT has seen a significant and rapid deterioration in its financial position over the last few months.

“We are concerned about the speed and pace of this decline and so are taking quick action to prevent the financial situation getting worse.

“Our action is designed to give the trust the immediate and direct intensive support to rapidly improve its finances, while continuing to provide the safe, high quality care its patients deserve.”

It is important to note that the current concerns are around the trust’s financial position, and not a criticism of its quality of healthcare.

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