Magazine article Public Finance

Trust Could 'Face Cumulative Deficit of £100M'

Magazine article Public Finance

Trust Could 'Face Cumulative Deficit of £100M'

Article excerpt

News of the health services financial troubles continue to emerge as one trust predicted it could face a cumulative deficit of £100m by March 2009.

A public interest report issued by external auditor PricewaterhouseCoopers said London's Queen Elizabeth Hospital Trust was predicting a cumulative deficit of £28.9m by the end of the financial year.

A recovery plan aims to achieve break-even from 2007/08 but resource accounting and budgeting (RAB) will mean the trust s cumulative deficit will continue to rise and could reach £99.8m in three years.

Under RAB, funding for local health economies is cut by the same amount as the previous year's overspend, and South East London Strategic Health Authority passes this on to each body that incurred a deficit. The auditors said this made it difficult for the trust to eradicate its cumulative deficit.

The trust admitted that in commercial terms it was insolvent and did not expect to recover financial balance without help. …

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