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Norfolk and Norwich Hospital ‘fell off a cliff’, says chief, as £27.3m deficit announced

PUBLISHED: 12:39 26 January 2018 | UPDATED: 18:10 26 January 2018

The Norfolk and Norwich University Hospital (NNUH). Picture: NNUH

The Norfolk and Norwich University Hospital (NNUH). Picture: NNUH

NNUH

A hospital chief is poised to ask for help to tackle the burden of PFI payments on his organisation.

The Norfolk and Norwich University Hospital (NNUH) board meeting today (Friday) heard the trust looked set for a £27.3m deficit for 2017/18, even though at the beginning of the financial year they had set a target of a £3.6m surplus.

Part of the financial pressure on the NNUH over the last year was paying off Octagon Healthcare - the company which built and maintains the hospital under a Private Finance Initiative (PFI) - to the tune of £20m.

The hospital also missed out on around £9.4m of funding which is only awarded if they hit financial targets, under what is known as the Sustainability and Transformation Fund (STF).

Chief executive Mark Davies said while he was a supporter of the PFI scheme on the whole, he would be asking whether NHS Improvement (NHSI) could help.

He said: “My personal view is I’m a great supporter of the PFI in that it gets us one of the nicest hospitals I’ve worked in. But it does come at a cost, it’s about £20m a year. The debate we want to have with NHSI is if we can get help with the PFI.”

He said there was a debate nationally about whether help was possible, potentially in the form of subsidies. He said elsewhere contracts had been bought out. He added: “But that’s very expensive.”

Mr Davies told directors: “Just those two [the PFI cost and loss of STF funding] would get us back to where we were at balance.”

But he said the deficit itself was down to operational costs and the STF loss on the whole. And that the nature of the STF funding was that if targets were hit “you get a big bonus” but if they’re missed “you fall off a cliff edge”.

He added: “I can’t say NHSI were delighted with it, but they knew it was coming. The organisation has got the brakes on as much as it should do.”

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