Hospital chiefs have been told they must better their financial plans after an investigation found it had breached its licence - with Wearside’s trust expecting to be £17.5million in deficit within the next year.
City Hospitals Sunderland NHS Foundation Trust has been told to rethink its proposals after the probe by regulator Monitor.
It found there are “reasonable grounds” to suspect the trust has breached its licence to provide NHS-funded health services through the issues.
The trust, which runs Sunderland Royal and the city’s eye infirmary among its services, will now draw up and deliver a financial recovery plan to reduce its deficit as well as a longer term strategic.
Monitor has also added a further condition to the trust’s licence stating it wants to see an improvement in the performance of its board in dealing with the issues the trust faces.
This will allow it to take further regulatory action in future if necessary, which could mean it can remove board members and appoint its own.
Patient safety and high quality care however remains the Trust’s top priority and that will not be compromised.City Hospitals Trust Sunderland chief executive Ken Bremner
Paul Chandler, regional director at Monitor, said: “This trust provides crucial healthcare services to the population of Sunderland, as well as some more specialist services to a wider patient population. “It is vital that the trust resolves its financial problems so that it can continue to provide those services on a sustainable basis.
“We expect the trust to develop a credible financial recovery plan and then make sure that plan is delivered.”
Monitor has said it will continue to scrutinise the trust’s performance and may take further regulatory action if needed.
The trust has said during a time of “almost unprecedented financial challenge this year “ it is forecasting a financial deficit of £17.8million by the end of 2015/16, even after having already identified savings of £13million.
It says it has an “excellent track record of delivering savings year on year” which have seen it cut back almost £35million in the last three years, but says it is becoming increasingly difficult to identify additional cost savings as it looks to the future.
It ended the 2014/15 financial year with a deficit of £7.9million, having incurred significant additional costs as a result of investing £2.1million in additional nursing posts
on its wards in response to the Francis Review, significant agency costs for medical staffing in key clinical areas to keep services safe, as well as increased nationally set insurance premiums.
It says its board has been very open and honest with the regulator from the outset and advised it of the forecasted financial deficit some time ago.
Monitor has been kept informed of its discussions and intended actions regarding financial recovery plans and has recognised that the action proposed by the trust will secure that the suspected breaches do not continue or recur.
It says in addition to short term efficiency savings it must develop a transformation plan for the next two to five years, looking at working more efficiently, as well as ways of offering care in different ways and others across the health and social care sector.
It says at this stage it had not identified any job losses and hopes this will not be needed by said any reduction in posts would be managed through natural turnover, which has been up to 11% in recent years.
The trust says it will continue to look at vacancies to ensure they are filled only where essential to reduce staff costs whilst ensuring patient care is not affected.
Its chief executive Ken Bremner, said: “The Care Quality Commission rated the quality of our services as ‘Good’ earlier this year and that would not have been achieved without the commitment and dedication of our staff.
“We do need however for our finances to once again return to ‘good’ as soon as possible.
“The next months and years will be challenging as the demands and greater expectations of a growing elderly population continue to impact on the delivery of healthcare, alongside the inevitable pressures and costs of advances in medicine, technology and drugs.
“Patient safety and high quality care however remains the Trust’s top priority and that will not be compromised.”
The trust provides hospital services to a local community of around 340,000 residents along with an increasing range of more specialised services provided to patients outside the area, in some cases to a population as great as 860,000.
It operates from, Sunderland Royal Hospital, Sunderland Eye Infirmary, The Children’s Centre in Durham Road, which it owns, Monkwearmouth Hospital on a limited basis, and Church View Medical Practice.
It has around 863 acute beds, an annual income of £336.37million and non-current assets of £204.96million.
It employs 5,119 people.