NGH borrows £7m to solve cashflow crisis

Northampton General Hospital Billing Road entrance.
Northampton General Hospital Billing Road entrance.

Northampton General Hospital is receiving £7 million in NHS funding to try to solve its cashflow crisis.

The shortage of money, like many other hospitals, is partly to do with a fall in the number of patients being treated at NGH, for which it is paid per procedure. This has left the trust in danger of being unable to pay its bills.

Other risks to its budget included increased patient numbers during winter, fines for not hitting performance targets and large numbers of more expensive temporary staff.

The latest board papers reveal finance bosses have asked for £7million from the NHS to shore up NGH until the end of the financial year.

Admitting the hospital had “liquidity issues”, a spokesman said just under half the money would be used to pay creditors.

The rest, when it came, would address the hospital’s wider financial deficit, bringing it down to £2.5 million by the end of the year.

Board papers show that as its finances stood, had it applied to be an independent NHS foundation trust, which all hospitals have to eventually become or else face penalties, it would have been refused a licence.

A spokesman said: “Despite the pressures, we have been able to pay 94 per cent of our non-NHS invoices in this financial year within 30 days, against a Department of Health target of 95 per cent. We have received £3m to alleviate the short-term issue of creditor backlog, and the remainder of the money when received will help address the deficit over the rest of the financial year, as will additional income which the trust expects to receive.”

One of the reasons Northampton General Hospital needs to borrow money is it is being forced to save £19m in 2012-13. It planned to save £6.7m by September by finding areas in the hospital that can be made more efficient, through staff’s own ideas and those of consultants Ernst & Young. However it has only managed to achieve £4.7m. As a result, NGH has overspent its overall expenditure budgets by £8.6m in the first half of the financial year.