NHS hospitals face spiralling cash problems

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Cash-strapped hospitals could miss their targets to make millions of pounds of spending cuts.

Mid Yorkshire Hospitals Trust needs to slash £26m from its budget for 2016-17 - but has fallen behind with its savings target every month so far this year.

Chief executive Martin Barkley.

Chief executive Martin Barkley.

The trust, which runs Pontefract, Pinderfields and Dewsbury hospitals, should have saved £10m by now but has only managed £3.7m, latest figures show.

It is among NHS organisations facing spiralling cash problems because extra funding from the government might not be provided if hospitals fail to meet pre-agreed financial targets.

Mid Yorkshire chief executive Martin Barkley said: “There is a considerable risk that we won’t be able to meet our financial plan for this current year.”

NHS trusts around the country are facing limits on their spending to bring down a collective deficit of £2.45bn - the biggest in the history of the health service.

For Mid Yorkshire, the government agreed new funding of £16.7m over the summer - but some of the cash is dependent on being £4.2m in surplus at the end of March.

NHS trusts will also lose some of the bailout cash if they fail to meet performance targets, including A&E patients being seen within four hours.

Mid Yorkshire’s latest financial report shows that ways of meeting some of the necessary spending reductions, known as Cost Improvement Programmes (CIPs), are yet to be found in parts of the organisation.

It said: “At month seven, the majority of divisions are struggling to identify and deliver the required CIP targets.

“To date, savings totalling £3.721m have been delivered and removed from budgets against a target of £9.956m leaving an adverse position of £6.235m.”

Among savings the trust needs to make is £8m from its bill for agency workers.