FACING “perverse” financial and contractual demands, Wye Valley NHS Trust has put out a plea for a single health and social care budget serving the county.

The trust board heard this morning (Thurs) that the trust had already run up a deficit of more than £4 million in the new financial year.

This, compared to a planned deficit of £3,970,000, resulted in an adverse variance against the trust’s business plan of £202,000.

Trust chief executive Richard Beeken said it was time for the county’s health economy to consider shared financial risk and shared governance of that risk.

Mr Beeken branded as “perverse” the contractual and financial conditions the trust had to work in.

Richard Humphries, non executive director, said the trust now faced pressures and challenges that it could not deal with on its own.

The debate this morning took place against the background of the Working Together for Herefordshire transformation programme and its intention to have the county’s health and social care teams aligning resources.

A recent summit of local system leaders – the trust, Herefordshire Council, 2gether, Herefordshire Clinical Commissioning Group, and Taurus Healthcare – reaffirmed  the case for change towards a sustainable health and care economy.

The board was told that pay expenditure, in particular, was a “concerning issue” in relation to medical staffing and driven largely by the fact at both consultant and middle grade levels, the trust was  operating well below its substantive level – causing cost pressures as gaps are covered.

It was, the board heard, now “critical” that the trust addresses the deterioration in its financial position and got back on track to deliver a position “no worse than the planned deficit.”

The trust continues to forecast that it will deliver the £19.1 million deficit submitted in its business plan, but accepts that delivery will now require “some significant effort”.

At this month’s performance reviews, the service units and corporate departments were told of the expectation that they needed to take “corrective actions” in order to recover the position and to breakeven against their budgets.

But the board noted significant risks that the trust has to manage over the next nine months including Cost Improvement Plan (CIP) delivery with the programme is currently £88,000 behind plan in terms of year to date delivery.

The Trust acknowledges a “great deal of work” to be done in order to deliver the £5.6m target.

Activity volumes - and securing the planned levels of income - the operation of the urgent care pathway and potential fines and overall operational cost pressures are also high on the “worry” list.

The cash position of the trust is entirely dependent on £18 million of financial support from the NHS to cover revenue expenditure and a further £14.5 million in loans to support capital spending.

However, the board heard today that an £8.4 million loan from the Department of Health for an on-line upgrade of patient records was close to its final sign off.