Statement from Joe Fielder, Chair and Matthew Hopkins, Chief Executive:
Those close to the Trust will be aware that over the past few months we have been experiencing financial challenges.
We announced in the second half of last year that we were encountering financial difficulties, when it became clear that our cash flow, and overall financial position, were not as healthy as had been reported.
When the extent of the problem became evident, the Board took prompt action to commission an external team of experts – Grant Thornton – to undertake a comprehensive review of our financial position and practices, to understand what had happened. Their report has now been published and is available in full.
It makes clear that as a Trust we have a long history of financial deficit and requiring external support, in the form of cash and loans, due to challenging circumstances, some of which are outside of our control.
The picture painted by the report is of a number of factors which all came together to create a broader problem. It identifies that over a prolonged period of time, we developed a flawed approach of not paying our suppliers on time. Some other factors include: higher demand and delivery of services above the levels agreed with our clinical commissioners; some optimistic assumptions about 2017/18; overspending; weak financial control; and a lack of forward analysis of our cash requirements.
Grant Thornton found that repeated instances of delayed payments to suppliers were being reported by clinical and operational teams. However the overall cash-flow risk was not high enough on the Board’s agenda and the manner in which the cash problem progressively developed, and ultimately unfolded, represented a significant breakdown in financial governance at the Trust.
As you can imagine this report is uncomfortable reading for us as a Board and we apologise on the Board’s behalf that this situation arose.
We have been working hard to improve. The long delays in paying our suppliers are clearly not acceptable and we’ve been taking steps to improve this situation. Specifically we will be ensuring we have more transparency in our financial reporting of debtors and creditors, and our forecasting and management of cash flow.
We are also completely overhauling our approach to reporting on financial issues, so that the correct information is gathered and scrutinised in the appropriate places – right up to our Board.
We have already made significant changes to the way we operate. A more detailed summary of the key recommendations and our response is available to view.
We would like to reassure the public and our patients that we are committed to providing the very best care to our community.
We would also like to pay tribute to our hard working and dedicated staff, who continue to do a fantastic job in providing care to our community, and we would like to thank our partners, patients and our valued suppliers for their continued support.