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03

Aug 2024

Last Updated: 02/08/2024
Health
Health

Why is Harrogate hospital running a £8m deficit?

by Calvin Robinson Chief Reporter

| 03 Aug, 2024
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Harrogate District Hospital.

This week, Jonathan Coulter, the chief executive of Harrogate and District NHS Foundation Trust, disputed that the National Health Service was “broken”.

In a report before a board meeting, Mr Coulter addressed the comment which was made by the new health secretary, Wes Streeting, and denied that the trust was in a similar state.

Mr Streeting was referring to the performance of the health service, such as waiting times and financial deficits.

While Harrogate may not be “broken”, it is tackling a tough financial situation.

In the depths of the trust’s board papers lies its finance performance - which currently stands at an £8.2 million deficit.

The hospital has planned for an overspend this year, which is earmarked at £5.2 million.

It means the figure is already some £3 million adverse to its target three months into the financial year.

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Jonathan Coulter, chief executive at Harrogate and District NHS Foundation Trust.

So why is the trust struggling with such a deficit so early in the year?

The Stray Ferret asked Harrogate and District NHS Foundation Trust what is causing its overspend and how it planned to bring it down.

A spokesperson for the trust said:

The drivers of the deficit include: certainty in relation to income, performance against the savings requirement as required in the planning guidance and some areas of premium rate expenditure which the trust is looking to reduce.

Meanwhile, Mr Coulter noted in his report that, as a result of the trust’s financial position, its cash balance is being “monitored closely”.

When asked to clarify what Mr Coulter meant by this, the trust said:

Like any company, the trust needs to ensure cash is managed appropriately to meet commitments. As an NHS organisation, cash support can be requested to support low balances; a more common occurrence when there are planned deficits. Given we are operating at a deficit, there is a need to monitor this position closely.

Funding gap

The state of finances at the trust is reflected across the country.

Mr Streeting has already launched an independent review in the health service, which will be led by Lord Darzi, is expected to uncover the issues facing the NHS.

However, for some trusts, much of the problems are short term - in particular on finances.

The NHS Confederation, which represents hospital and mental health trusts across England, said a mixture of industrial action, soaring inflation and a crumbling NHS estate had left its members concerned over finances in the short-term.

Matthew Taylor, chief executive of the organisation, pointed to a £3 billion funding gap which has left trusts concerned.

He said:

In the shorter-term, our members are incredibly concerned that there’s an estimated £3 billion funding gap in systems' financial plans, due to the costs of industrial action and inflation, and what NHS services have already been committed to in terms of delivery in this financial year. This must be addressed at any fiscal event in the autumn.

Equally, our members have long been frustrated by the lateness of the annual planning process and recognise that this has been largely determined by when the Treasury confirms the NHS’s budget for the year ahead. So, with a new administration now in office, they hope this destructive cycle will come to an end. Put simply, the earlier the NHS has the funding it needs, the more time it will have to plan.

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