Despite predictions it would manage to break even this financial year, the Southern Health and Social Care Trust is now expected to record a deficit of £2 million this financial year, according to its finance director.
Speaking at a meeting of the Trust’s board on Thursday, March 30, the Trust’s director of finance, procurement and estates, Catherine Teggart, revealed that at the end of month 10, the Trust predicted an overspend of £2.7million but reductions in agency spend in months 10 and 11 mean a deficit of around £2 million at year end is now predicted.
“For the 2022/23 financial year we are predicting an overall deficit of £2 million, we have overspent at month 11 by £2.6 million,” Ms Teggart told the Trust board.
“We had been predicting a break even position at month nine but through the winter period we have seen an increase in the cost of living with some inflationary increases in relation to the cost of our contracts.
“We have had increased fuel spend and the cost of our winter planning was more on the payroll budget than had been expected.”
In terms of payroll, the spend is £11.8 million over budget and stands at £541 million at the end of February.
“The main areas of overspend continue to be in medical and nursing, which has expenditure in excess of budget of £7.9 million and £12.3 million respectively”, according to an executive summary of the Trust’s financial performance report.
The Board was also informed that approximately £34.8 million of agency spend relates to off contract agency and, when compared to February 2022, this figure has increased by around 30 per cent.
“Thanks to a lot of work we have done, we have a slight reduction in our off contract agency costs and have seen an overall reduction in our critical shift payment,” said Ms Teggart.
“We saw it come down by £360,000 in February and we are hoping for some of that to come down further to ensure that we live within the £2 million deficit that we are reporting to the Department.
“The Department has given us approval for a £2 million deficit. It will provide us with funding from appeasements elsewhere within its budget.
“It has been a very, very challenging year. We will end it with an overall allocation of £905 million. It is not where we want to be but it is reflective of the very difficult few months we have had and the need for off contract agency.”
As for prompt payments, the Trust failed to meet its prompt payment target of 95 per cent of invoices paid within a 30 day cumulative basis in February.
In the calendar month, it paid 94.8 per cent of invoices within the 30 day target and its cumulative position to date is now is 93.3 per cent.
According to the executive summary, the Trust also failed to meet its target of paying more than 70 per cent of invoices within 10 working days, achieving 67 per cent and its cumulative year to date position is 68 per cent.
Looking ahead, Ms Teggart said the next financial year will be a very difficult one for the Trust Board where priorities will need to be identified if budgets are to be met.
“We have started planning for the next financial year and it will be a very challenging year,” said Ms Teggart.
“The outlook for next year is that we will have to make some very important decisions in terms of how we spend our money and where our priorities are.
“We will definitely be pushing down the high cost flexible spend and agency spend to reduce that discretionary spend.
“I will introduce the financial plan to the Trust board in May, at the point we should be receiving an initial draft allocation from the department on what our opening budget is for next year.
“Regionally, there is a recognition this is going to be a very difficult year and an efficiency best value regional group has been set up to have a look at areas that we will have to investigate in terms of making savings going forward.
“Internally, we have our own agency reduction group and I am working through and reporting through the outcomes of the financial, productivity and sustainability review.”