A health trust is facing a potential £10million black hole in its books by the end of the financial year as leaders called for more Government funding.
North Tees and Hartlepool NHS Foundation Trust, which runs Hartlepool and North Tees university hospitals, is currently in the red by £7.2million.
Finance chiefs yesterday reported the “most likely” scenario by the end of next March is a £10.7million deficit but, if no action were taken, it could be £15million.
Planned measures are expected to reduce it to £7.3million.
The trust’s precarious financial position means it is at risk of intervention by the hospital watchdog Monitor.
Trust chief executive Alan Foster yesterday told a Trust board meeting it faces “unprecedented” pressure on services while funding is “out of balance” compared to its costs.
We face at the moment an unprecedented number of service pressuresAlan Foster, Hospital trust Chief Executive
Staff shortages and a reliance on agency and locum doctors and consultants have seen the trust overspend.
Mr Foster said: “Performance and quality issues, which we all subscribe to, is driving our overspend to a degree.
“There is no recognition from the Department of Health that aspiring to achieve quality is fine, but they are not putting the resources in at the other end.
“It is exacerbated by staff shortages, meaning we are having to pay even more for locums.”
He added: “The tariffs for some of the payments we get for some services doesn’t cover the cost. At the moment it is out of balance.”
Of the £7.2million deficit by the end of September, overspending on staff pay accounted for £1.7million with most being eaten up by locum costs to pay for freelance consultants and doctors.
Mr Foster said: “At the moment we are spending a lot on locum costs, which we can’t afford, to be blunt.”
A plan by the trust to employ locums directly instead of through an agency is expected to save it around half a million pounds a year in VAT.
It will also look abroad for foreign nurses to help bring down staff costs following a change in immigration rules.
“We are doing all that we can,” said Mr Foster. “We are looking at the services we have got to see what options we have got for next year and also looking at management structures to make them as lean as possible.”
The trust has an annual savings target of £10million and has so far achieved £4.4million of efficiencies.
He added: “We face at the moment an unprecedented number of service pressures and issues we are trying to grapple with to keep services going and meet the standards we all aspire to.”
Trust chairman Paul Garvin said they were waiting to see how much extra funding they might receive from the £8billion promised for the NHS by the Government in next month’s budget.