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Last Updated: Wednesday, 20 October, 2004, 13:23 GMT 14:23 UK
Foundation trust records deficit
Bradford Royal Infirmary
The trust adopted foundation status on 1 April
One of the first foundation NHS trusts is facing official intervention after recording a budget deficit.

Bradford Teaching Hospitals NHS Foundation Trust adopted foundation status on 1 April.

Foundation trust regulator Monitor has sent in advisers after a "significant" gap between the trust's forecast and actual results in its first quarter.

Monitor has not revealed the size of the deficit but the trust has estimated it may face a 4m shortfall this year.

It is the first time the regulator has had to use its powers in this way following the reform of the NHS under the Health and Social Care Act 2003.

Foundation hospitals have freedom from central control, including the right to manage their own budgets.

We would like to reassure our local community that this review is linked solely to financial issues.
David Jackson, chief executive of Bradford Teaching Hospitals NHS Foundation Trust

Bradford was among the first wave of 10 to be granted the freedoms from 1 April. Another 10 followed on 1 July.

Monitor was alerted to the financial problems in August and after discussing the situation with the trust has decided to send in the advisers, Alvarez and Marsal.

The advisers, which will be paid for by Bradford, have been given a month to report back on the budget and make recommendations.

The trust, which includes Bradford Royal Infirmary and St Luke's Hospital, could lose its foundation status if the financial problems are not solved but Monitor said it was a "long, long way" from reaching that situation.

A Monitor spokesman said the trust was expected to have a small surplus but actually recorded a financial deficit.

Trust chief executive David Jackson said: "We would like to reassure our local community that this review is linked solely to financial issues.

"It is not in any way related to the quality of patient care, or other areas of clinical performance where we continue to build on the successes we have achieved in the past. "

He said similar to many NHS trusts, Bradford was facing a number of "external cost pressures".

And he added: "Additionally, as an NHS foundation trust, we are piloting the new funding systems for NHS hospitals and we no longer have access to financial support from the wider system."

Despite the financial concerns, Bradford retained its three-star rating in the last NHS performance tables - the grade needed to apply for foundation status.

Andrew Cash, chair of the Foundation Trusts Network, part of the NHS Confederation, said it was not "uncommon for NHS organisations to face financial pressures because of the many demands on their resources".

And he added foundation trusts, in particular, were at risk as they were operating under a new financial regime.

Government response

Health Minister Lord Warner stressed the financial problems at Bradford would affect patient care.

He said: "There is a financial blip that has got to be dealt with. It has been identified early.

"They are going to tackle it and they will take the necessary steps to deal with it."

Q&A: Foundation trusts
07 May 03  |  Health

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