Hospital sheds light on debt action plan

IPSWICH Hospital's finance experts today explained the complicated funding system which has led to the hospital needing to find £25million in savings this year.

IPSWICH Hospital's finance experts today explained the complicated funding system which has led to the hospital needing to find £25million in savings this year.

In the past ten days the amount of money the hospital needs to save appears to have risen dramatically - from £16m at the beginning of last week to £25m today.

Initially the hospital's debt for last year was believed to be £4.2m. In order to pay this back, pay the interest, and not overspend this year it needed to save a total of about £13m.

Jason Kirk, the hospital's deputy director of finance, said: “We know that typically we will only be able to achieve around 70 to 80 per cent of the savings that we actually plan, so we set the savings target higher.


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“In this case, we were looking at £16m of savings schemes.”

Last week the hospital revealed that its debt crisis had deepened and that the total debt was actually more than £7m worse than first thought - taking it up to £11.9m.

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This took the total savings needed up to £20m, but in order to make sure they achieve at least £20m of savings the hospital have set their target at £25m.

Marilyn Martin, senior partner at PKF accountants and business advisors in Ipswich, said it made sense for the hospital to set themselves a 'buffer' when it came to their savings.

She said: “The problem that the hospital have is that some of their income is dependent upon activity. They cannot predict with absolute certainty the number of people that they are going to see through their doors.

“Therefore they may not be able to carry forward all of the savings schemes that they want to without compromising patient care.

“Giving themselves a kind of buffer zone like this means they have some flexibility.”

Weblink: www.ipswichhospital.org.uk

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