By Ian Dipple Thursday 07 March 2013 Updated: 08/03 09:07
THE HEAD of finance at the Trust which runs the Alexandra Hospital has admitted they will need to do more than just break even in the future in order to be able to invest in patient services.
Chris Tidman, director of resources at Worcestershire Acute Hospitals NHS Trust, acknowledged they needed to create more 'head room'.
The Trust is currently running a £1.2million deficit but expects to plug the gap by the end of the financial year largely as a result of having its assets re-evaluated to extend their lifespan and so reduce the amount by which they were expected to fall in value by more than £2million.
Save the Alex campaigners branded the move an 'accounting trick', a claim Mr Tidman rejected.
"This is something which a number of other Trusts have done. At the moment the life span of the assets is given by the district valuer but other companies come in and offer a different view," he told the Standard.
"We believe some of the asset lives given by the district valuer are not right because you tend to operate out of hospital buildings for longer than anticipated."
A deal has also been struck with commissioners on a range of issues including payment for the increased costs of meeting the continuing rise in emergency demand.
Bosses had hoped to be left with a £1.5million surplus this year but had to abandon that plan, blaming the increase in costs associated with more people coming through A&E and repeated outbreaks of norovirus, which has seen hundreds of beds closed and the loss of about £1million in income from elective surgery.
It has also hit the Trust's ability to make efficiency savings.
But breaking even will not be an option in future as the Trust needs to make a £1.3million surplus in each of the next nine years to repay a £12million government loan to help pay its day-to-day bills.
In a recent Westminster Hall debate on the future of the Alex, Redditch MP Karen Lumley called the Trust's debt problem a 'ticking timebomb'.
Mr Tidman acknowledged the Trust's legacy debt, of about £18million due to overspending by the previous management between 2001 and 2006, was a millstone around their neck but said if they achieved Foundation Trust status there was an option to deal with it by converting it to a long-term loan.
"It is fair to say the Trust board does recognise that given the economic conditions, what we do need is greater head room going forward to withstand any pressures," he said.
"That said any organisation private or public will need contingency plans.
"While the Trust has a legacy debt this will be the seventh year we will either have broken even or delivered a surplus."
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