Directors of Hospital Trusts cautioned about financial situation

NHS England has signaled that it may replace one or more executives at a hospital trust if its financial performance does not show consistent improvement. The warning was sent to Lancashire Teaching Hospitals Trust in March, though the letter has only recently been made public.

The regulator indicated that without clear financial progress, the trust could be "subject to further formal action," including "requiring the licensee to remove one or more of its directors." The trust, which oversees Royal Preston Hospital and Chorley and South Ribble Hospital, emphasized its commitment to reducing its deficit and enhancing operational performance.

Earlier this year, the trust was placed in financial special measures along with other hospitals in Lancashire, including Royal Blackburn, Burnley, and Blackpool Victoria hospitals, as well as NHS Lancashire and South Cumbria Integrated Care Board (ICB). These organizations were directed to implement significant cost-saving measures.

Lancashire Teaching Hospitals Trust has struggled to meet financial targets for years, with improvement plans agreed with NHS England in 2018, 2021, and 2024. The recently published letter highlighted serious concerns about the board's decision-making and financial oversight, noting that the trust had not adequately mitigated risks of non-compliance.

The letter cited a deficit of 42.1 million as of November 2024. Recent board documents show some progress, with the deficit reduced to 17.7 million, although this remains higher than the planned 2.5 million. Achieving these savings has involved difficult measures, such as the closure of the 24-bed Cuerden ward at Chorley Hospital in March and the planned shutdown of Finney House, a 64-bed care home run by Royal Preston Hospital, to cut costs.

Infrastructure challenges continue to affect the trust, particularly at Royal Preston Hospital. Plans under the New Hospitals Programme to replace both sites by 2030 have been delayed, with construction now not expected to begin until 2035.

An independent review by the Good Governance Institute recognized the trust's strengths, including capable leadership, a committed workforce, and a culture of improvement, noting early signs of progress in multiple areas.

A trust statement said: "Throughout the year, the trust has been working hard against its robust and comprehensive plan to address and resolve longstanding financial performance issues. We welcome the support we have had and continue to receive from NHS England."

Author: Gavin Porter