Cash fears over South Tyneside Hospital's £6m cash shortfall

It reveals health bosses are battling a £6m black hole, just five months into the financial year - £3.24m more than they had planned.

Under a current target – known as a control total – ratified with NHS regulators only last December, they had expected to be just £2.76m in the red by the end of August.

Neil Mundy, chairman of South Tyneside NHS Foundation Trust, which runs health care services, has admitted there “no likelihood” of reducing the deficit to an agreed £880,000 by April.

If it fails to do so, the Trust will miss out on up to £4.2m from the Sustainability and Transformation Funding (STF), a government pot designed to help trusts balance the books.

It has already had £1.19m of STF funding withheld due to its failure to hit monthly targets.

The Trust blames spiralling agency and locum costs for much of its current financial woe.

Since April, it has spent almost £2m on temporary staffing, including £1.67m in acute medicine, against a budget of just £1.28m.

And bank costs – payments to staff for working extra shifts - are £1.3m, compared to a budget of £242,000.

To meet its control total, the Trust must also make £11.43m of efficiency savings under a Cost Improvement Plan (CIP) agreed with the NHS, during the current financial year.

The monthly Board report reveals just £5.19m of savings have been identified, with a further £6,24m still to be found.

Such is its position that it is now in discussions with national regulator NHS Improvement (NHSI) and local partners to agree a long-term financial recovery plan.

In a statement, Julia Pattison, executive director of finance, said: “Like all NHS providers across the country we are operating in an extremely challenging financial climate and are currently underperforming against the ambitious target we set with NHS Improvement to remain within an overall ‘control total’ for 2017/18 of £0.88million deficit.

“The reasons for this are complex but largely a result of extensive agency and locum costs, particularly in acute medicine, which mean we have spent almost £2m on temporary staffing in South Tyneside since April 2017.

“Whilst we remain within the ‘agency cap’ set by NHS Improvement, this is clearly cause for concern and ultimately requires long-term, whole system change in order for us to truly address these difficult workforce issues.”

“We are also in discussions with our partners across the health and care system in South Tyneside and Sunderland to agree a positive long-term financial recovery plan over the next three to five years.”