A MULTI-million pound ‘cash buffer’ has been given to the trust that runs Queen Alexandra Hospital.
A £6.2m loan has been given to Portsmouth Hospitals NHS Trust (PHT).
It has been given by the Department of Health, in the hope it will help get the trust on track to attain foundation trust status.
As previously reported, PHT had asked for a £7.5m loan, which would be used to prove the trust is ﬁnancially stable in order to gain the status.
Foundation trust status would give the trust more say on what services it offers.
Being able to balance the books is seen as a key requirement for hospitals if they are to be given the status.
Rather than £7.5m, the trust has been granted a £6.2m loan, which has an interest rate of 3.5 per cent a year, and no deadline to pay the amount back. Ben Lloyd, director of finance and deputy chief executive at PHT, said: ‘One of the things you need to show to get foundation trust, is show you are financially stable.
‘We’re using this cash injection as a buffer.
‘For Portsmouth, a very large component is the Private Finance Initiative (PFI), which is paid at the beginning of the month. Our commissioners don’t pay us until later in the month. We have a timing issue. This money will help us with that.’
The PFI was used to build the Queen Alexandra super-hospital, at a cost of £256m.
But the trust must now pay back around £45m a year in mortgage payments for the next 29 years.
Mr Lloyd said it was ‘highly unlikely’ the trust would get any significant improvement on the PFI agreement.
Hospitals that achieve foundation trust status are expected to deliver a surplus on income and expenditure, equivalent to one per cent of turnover.
For PHT this would mean making a surplus of £4m – at the last financial year, the trust had a surplus of £4.3m.
Mr Lloyd said that the trust got there in a different way to how it had set out its plans, but would learn lessons from that. This year it hopes to make the most use of facilities, such as ensuring operating theatres are used as much as possible, and get better deals on contracts.