Health watchdog Monitor has launched an investigation into the finances of Lancashire Teaching Hospitals Trust - after hospital bosses said making efficiency savings is unachievable.
The probe aims to understand why the trust’s finances have deteriorated and what can be done to fix them.
The Trust - which runs the Royal Preston Hospital and Chorley and South Ribble Hospital - said to March 2014 it has delivered savings of more than £60m, which is an average of 4 per cent of its turnover every year
But bosses say this level of saving is ‘extremely difficult to sustain’ on an ongoing basis, and during 2014/15 they have made a further £10m in savings which is over 2 per cent.
Its five year strategic plan committed to delivering savings of two per cent initially, rising to three per cent in later years.
But the hospital trust is now required to continue to deliver annual savings of more than 4 per cent.
And they said they do not believe it is possible to achieve this level of saving whilst maintaining services and care quality.
So they have contacted Monitor to request financial support, prompting the regulator to open its investigation.
Monitor’s investigation will consider our short and long term financial viability, and expects that a financial recovery plan will be developed alongside our local partners, because much of our financial performance is dependent upon how the wider health and social care system is working.
Karen Partington, Chief Executive of Lancashire Teaching Hospitals NHS Foundation Trust said: “We are committed to providing the very highest standards of care for our patients, and it is important to note that this investigation relates to financial sustainability – it is not about care quality.
“Over the past four years our staff have demonstrated great commitment to working more efficiently and effectively, and together we have managed to deliver considerable costs savings whilst maintaining services and standards.
“However, the board is not willing to compromise on the quality of care we are able to provide and we do not believe it is possible to continue to deliver the significant level of savings required going forwards without affecting patient services, and so we have taken the decision to request financial assistance from Monitor.
“We will fully co-operate with the investigation, and will be working with local health and social care organisations to develop a financial recovery plan that secures the highest standards of care for our communities.”
Paul Chandler, Regional Director at Monitor, said: “Patients in Lancashire rely on the trust to provide their local hospital services, and many more people rely on the specialist services the trust provides in the wider region.
“We want to make sure that Lancashire Teaching Hospitals can continue to provide high quality care while balancing its books.
“The trust’s leadership has taken steps to address its problems, but we have launched this investigation to better understand the financial issues and find out what needs to be done with other local partners to fix them.”