Debt report made public

THE frantic search to staunch the cash haemorrhage from Hinchingbrooke - clinically excellent, but financially weak, according to the Healthcare Commission - reaches a milestone today (Wednesday) with publication of a probe by the East of England Strategic Health Authority into the hospital's finances.

The SHA is reviewing hospital provision across the whole of the east of England, but the Huntingdon hospital's mounting debt crisis has put healthcare in this area into sharp focus.

Irrespective of what happens elsewhere in the region and over the next 10-20 years, Hinchingbrooke's finances need sorting quickly to avoid patients losing out.

In the meantime, specialist teams at Hinchingbrooke - consisting of consultants, GPs, managers and patients' representatives - are looking at how departments and services could be streamlined without damaging healthcare. Public meetings will be held later this month to consult on the conclusions of four of those teams - surgery, obstetrics, A&E and cancer care.

In parallel, the SHA, the hospital and the new Cambridgeshire Primary Care Trust are considering three scenarios for the hospital, all of which involve a reduced caseload:

n Keeping services much as now.

n Streamlining the way the hospital provides the same services.

n Shipping work wholesale to Addenbrooke's and Peterborough.

The first option would not save enough money. The third option would be wildly unpopular with the district's patients and with many in Fenland and East Cambridgeshire. Clinicians say it could cost lives.

That leaves the streamlining option. Hinchingbrooke will need all its imagination to devise a way of keeping most services local while saving significant cash.

The public will be consulted before the PCT (notionally) takes the final decision. The reality is that the decision will be taken in Whitehall, and not necessarily on the basis of what is in the best interests of Huntingdonshire patients - unless we make enough noise.

So where did the debt come from?

Until this year, the debt looked manageable - around £4million in 2004/05, most of which was covered by a grant or loan (depending on whom you ask) from Huntingdonshire PCT.

Last year (2005/06) the Hinchingbrooke board was confidently predicting a shortfall of £400,000 on an £80million annual budget - at 0.5 per cent of turnover.

That's as close as you get to break-even. But suddenly the accounts started to unravel. The £400k was not a revenue account figure, it transpired. It assumed, in particular, that the PCT would not ask for its money back for a second end-of-year contribution, and that the Luminus Groupwould buy the nurses' accommodation - another multi-million pound one-off cash injection.

Suddenly, last March, that turned into a projected £6.5million debt projection, which became £7.75million by the time the final bills for the year arrived in the spring.

So how has that turned into the current prediction of a deficit of nearly £30million by the end of March 2007?

We start the year with that £7.75million and a new treatment centre that is not looking after nearly as many patients as everyone expected (or attracting the cash that would follow those patients). Given the number of finance experts who crawled over the business case for the £22million centre, which opened in September 2005, it is hardly fair to single out the Hinchingbrooke board to blame for getting the numbers wrong.

Then the Government clawed back £19.1million - including £6.5million in error because the finance department at Hinchingbrooke ticked the wrong box on a form. But Hinchingbrooke knew at least £12million of that had to be paid out and should have budgeted for it.

With its income reduced by around 23 per cent this year and with PCTs unable to afford all the work the hospital has done for their patients, there was never any prospect it would balance its books.