Croydon NHS asks for £11.4m bail out
An NHS trust bailed out of a £27.2m blackhole has asked for a further £11.4m to balance the books.
NHS Croydon has submitted a business case for another multimillion pound bailout from NHS London from the trusts reserve fund just a month after an independent report blamed widespread mismanagement for a £22.4m overspend during 2010/11.
A review of the trust’s finances for the coming year has discovered contracts signed during the 2010/11 overspend must be honoured, causing a further £11.4m shortfall.
A spokesman for the NHS Croydon, which is part of the NHS South West London cluster, explained the money was coming from a central reserve fund held against financial risk 2 per cent of NHS London’s budget.
She said: "In the financial year 2010/11 Croydon were spending more than their budget, there was a thorough investigation published into how that happened.
"This year NHS Croydon will spend around £600m on patients and it is focussed on achieving financial balance.
"To achieve this balance Croydon is requesting access to part of the 2 per cent fund held across London and has submitted a business case for this."
Finance reports for 2010/11 claiming a £5.4m surplus were discovered to actually be £22.4m in debt, a discrepancy discovered when the trust was absorbed into the South West London cluster.
NHS London commissioned an independent report by Ernst & Young, published on Tuesday June 19, which listed a catalogue of mistakes including accusing a senior finance employee of making "significant and unwarranted adjustments" to balance sheets statements and ledgers.
The employee is reported to have left in May 2011, two months before the discrepancy was discovered.
Savings of £16m were made last year to reduce spending, and a further £25m must be made this year.
The spokesman for South West London NHS was unable to confirm if the latest bailout would be the last.
She said: "NHS Croydon is working hard to achieve balance, primarily through making efficiencies to its service."