Sherwood Forest NHS trust debt increases by £2m

In 2006, the trust estimated its King's Mill Hospital PFI project would cost £976m in its 38-year lifetime.

The deficit at a financially-troubled NHS hospital trust in Nottinghamshire increased by more than £2m in December.

An internal report showed the Sherwood Forest NHS Hospitals Foundation Trust failed to stop the debt increasing despite warnings from the health watchdog Monitor.

The total trust debt has risen by £15.5m since April 2012.

The trust said losing £2.26m in December was in line with its plans for the month.

It said a a number of measures were being implemented in the final quarter of the financial year and the internal report said it had drawn up an action plan to tackle the debt.

It said based on December information, the forecast outturn for the year ending in March was likely to be an £18.5m deficit.

Monitor's main concerns in September 2012 were that the trust was struggling to meet Private Finance Initiative (PFI) repayments for King's Mill Hospital and that the hospital was being underused.

The trust had signed for the period 2005-2043 for a total cost of £976m to pay for a revamp. Figures released in 2012 showed the cost of the PFI deal had risen to £2.05bn.

'Radical changes'

The trust's chair Tracy Doucet stepped down last year after a letter from the independent health regulator group Monitor stated it was "extremely concerned by the very serious issues facing the trust".

Malcolm Prowle, an expert in public sector finance at Nottingham Trent University Business School, said "radical changes" would be required for a deficit of "this magnitude".

"You're looking at things like rationalisation of services and outlying facilities, the merger of the trust with somebody else, all sorts of major things... it's difficult... But it has been done in other parts of the country" he said.

Job losses would form an inevitable part of the changes, he said.

Mr Prowle also suggested a bailout from the government could be an option for an interim period while the trust "sorted itself out".

"The criteria is that you have a plan in place to eliminate the deficit," he said.

The Sherwood Forest trust was awarded foundation trust status in 2007 and serves a population of more than 400,000 people across Nottinghamshire as well as parts of Derbyshire and Lincolnshire.