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Health authority can't afford wages

Date published: 09/02/2006

An NHS health authority is having to borrow nearly 97 million to pay its staff next month. Surrey and Sussex health authority is heading for a deficit of 83 million for the financial year ending in March. However, overspending by its primary care trusts and hospitals last year means that it's actually heading for a shortfall of 97.3 million, requiring it to borrow money and delay projects to pay contracts next month.

The health authority will borrow 55 million from the NHS bank, on top of 40 million cash borrowing that it has already agreed. In addition it will delay capital developments to make further savings of 2.3 million. KPMG and McKinsey's are currently working with Surrey and Sussex to develop a financial turnaround plan.

In December it was announced that NHS trusts were forecasting a net deficit of 620 million, which the Department of Health wanted to reduce to 200 million. However, analysts claim that the extent of Surrey and Sussex's financial problems will make this achievement difficult.

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