A HEALTH trust is in the red by almost £4m and fears it could even increase further in the next 12 months.
North Tees and Hartlepool NHS Foundation Trust has said it expects the situation to worsen to around £5m during the next financial year.
The whole system is stretched financially.Lynne Hodgson, director of finance, ICT and support service, North Tees and Hartlepool Foundation Trust
The financially stretched trust now faces taking out a loan of £2m to ensure it does not put staff pay at risk.
It comes after the Mail revealed the trust lost £735,000 in tax over the land for a new hospital at Wynyard that was sold back to the developer after the plan failed to get approval.
The trust bought the land for £4.2m in 2010, and although it sold it back for the same amount, it lost the 17.5 per cent VAT paid to the treasury as part of the sale.
The deficit cannot be paid off with the cash generated by the sale of the land, as the funding put forward for that project by the now-former North East Strategic Health Authority was specifically earmarked for the development.
Hospital bosses say part of the cause of the trust being in debt is because of additional costs it has to face including a £3.1m rise in insurance premiums it must pay, bringing that bill to £9.1m.
The trust had forecast it would be £2.6m in the black, with its full budget for the year at £274m.
Lynne Hodgson, director of finance, ICT and support service, told a meeting of the trust’s board: “I’m sad to report there is a deficit for the first time in my career.
“The whole system is stretched financially.
“We are not unique to be in this position and we have in the past aimed not to be in deficit, but in surplus and we are operating at a possible £3.9m, £6.7m away from the plan.
“There has been a period of pressure on the system, major pressure, and stress on delivering some of our efficiencies and expenditure on pay because of agency and locum staff and £250,000 on non-pay drug spends in relation to medical equipment.”
The decision to take out the loan was taken after consideration by the finance committee.
The trust has said this would allow additional investment to develop plans for the University Hospital of North Tees in Stockton as new hospital plans are on hold.
As part of its budget, it has set out how it has had to factor in a reduction of £597,000 for respiratory services.
Staff will be paid one per cent more, with HM Revenue and Customs superannuation to also lead to an increase in the pay bill.
It has also either decommissioned or lost the tender for services including health trainers in Hartlepool and Stockton, weight management, closed the onsite nurseries in both hospital grounds, and transferred haematology inpatients services and vascular activity to other centres.
However, it has won the tender to provide speech and language therapy across County Durham for £1.9m.
Its land assets have also undergone a re-evaulation, with its value up to £11m from £8m, although that will not free any funds.
Mark Edmundson, area organiser for Unison, said reorganisation of the NHS had put a strain on the service, as had the high costs of bringing in agency staff.
He said: “Staff are under a terrific strain, as are health trusts across the board, and one thing that has to be born in mind is that this is not a trust that is not under PFI and the financial difficulties they have brought as well.
“You factor in these issues and you get the perfect storm in terms of staffing pressures and community services suffer as a result of that.
“In the first instance for our members and staff in the hospitals, we would seek reassurances wages will be paid, but the concern is also with the patients and health care.”