FD admits trust's £40m debt 'will take five years to clear'
The £40m of debt faced by St George’s Hospital Trust will not be paid off for another five years, its finance director has revealed
Colin Gentile, executive director of finance and turnaround at Tooting-based
St George’s, said the hospital was still £40m in debt, which could take another
five years to be cleared. ‘Maybe in five years we could see the deficit
disappear, but that will involve some negotiating with the Department of
Health,’ said Gentile in an interview
published in Accountancy Age this week.
The trust has one of the highest deficits, but the long-term nature of the
challenge may well worry senior NHS finance figures.
Gentile took over the role when the trust had a debt of £30m in 2004, but
said the hospital’s financial position had greatly improved over the last three
years, despite the debt growth. St George’s is moving towards balancing its
books, and will post a £4.4m deficit for 2006/07. He expected financial balance
followed by surpluses to pay off the £40m.
The hospital is well known for being one of the first NHS trusts to reveal
its dire financial situation, back in 2004, 18 months ahead of health secretary
Patricia Hewitt’s admission that the NHS was set to build up a £620m net
deficit. The hospital piloted the use of private sector business recovery
experts to turn around its financial situation.
Many NHS bodies saw £178m wiped off their deficits last week as the
Department of Health followed an Audit Commission recommendation to end the
controversial resource accounting and budgeting regime. Other changes to the
NHS’ financial regime include the introduction of a more formal system of loans
between NHS bodies, replacing informal brokerage, plus a prevention of leakage
of cash from capital to revenue.
Read the full interview with Colin Gentile
here
