The trust which runs hospitals in Preston and Chorley has been accused of financial mismanagement after predicting losses of almost £47m this year.
Health regulator Monitor has stepped in to help the Lancashire Teaching Hospitals NHS Foundation Trust recover from what it describes as the worst deterioration in the whole of the NHS.
Whilst that is unlikley to be the worst deficit in the country, it is certainly the worst drop – the largest deterioration – from one year to the next
The trust had a deficit of just £2.8m last year, but has now forecast a staggering £46.8m loss for 2015/16.
“Whilst that is unlikley to be the worst deficit in the country, it is certainly the worst drop – the largest deterioration – from one year to the next,” said a spokesperson for Monitor. “We have serious concerns about it and that is why we have chosen to take action.”
The regulator says it has acted to protect patients. It is now appointing a financial improvement director to oversee the running of the trust.
The move follows an investigation into the way finances have been handled.
Monitor, called in by the hospitals themselves in March when they revealed they could not hit their savings targets, found the trust in breach of its licence to provide care.
There were, it said, “serious concerns over a deepening hole in its finances and problems with its financial management.”
A series of actions had been agreed with the trust which were intended to improve the way it was being run.
Monitor found the trust lacked both the robust plans and the financial management needed to address its problems. It will also amend the trust’s licence to ensure that, if it fails to make the changes, further action could be taken in future including changes to the leadership team.
Paul Chandler, regional director at Monitor, said: “The trust urgently needs to improve its financial position in order to continue to provide the quality of care that people across Lancashire expect.
“This year the trust predicted that its finances will be significantly worse than last year. There are a number of reasons for this, notably problems with the trust’s financial plans and management.
“The trust is now on notice to reduce its forecast deficit quickly and, whilst it has our full support as it delivers its recovery plan, we will strengthen our action if necessary to ensure it manages its finances better in future.”
Karen Partington, chief executive of the trust which runs both the Royal Preston Hospital and the Chorley and South Ribble Hospital, said: “It has been widely reported that hospitals are finding it increasingly challenging to balance the books whilst demand grows, costs rise, and funding reduces.
“Monitor has acknowledged that there are a number of reasons for our financial position, of which our financial planning and management are a part, and has given us its full support to deliver our recovery plan.
“We are absolutely committed to complying with the enforcement actions that Monitor has mandated and will work with the Monitor team and with local health and social care organisations to produce financial recovery and sustainability plans.
“Our staff have demonstrated time and time again that they can rise to whatever challenges we face, and I’m confident that we’ll be able to take the necessary action.”