Hospital trust directors warned over finances

NHS England has threatened to replace one or more directors of a hospital trust if its financial situation does not improve, it has emerged.

The body, which manages how health services are run, wrote to Lancashire Teaching Hospitals Trust in March but the details have just been published.

It warned that unless the trust showed a steady financial improvement, it would be "liable to further formal action by NHS England" - which could include "requiring the licensee to remove one or more of its directors".

The trust, which was placed in financial special measures earlier this year with several others, said it remained committed to tackling the financial deficit and improving its performance.

The trust runs Royal Preston Hospital and Chorley and South Ribble Hospital.

In February, BBC North West revealed that it was one of three trusts in Lancashire to be placed in the equivalent of financial special measures along with the organisation which funds them - NHS Lancashire and South Cumbria Integrated Care Board (ICB) were put into the equivalent of financial special measures along with three of its hospital trusts.

The trusts - which run the Royal Preston, Chorley, Royal Blackburn, Burnley and Blackpool Victoria hospitals - were told they were going to have to save tens of millions of pounds.

Lancashire Teaching Hospitals Trust has been struggling to meet its financial targets for years.

It originally agreed a plan with NHS England in 2018, again in December 2021 and finally in June 2024.

In March, NHS England wrote to the trust again with a "Notice of Imposition of Additional Licence Condition" – a letter which has only now been published.

This said NHS England had "serious concerns regarding effective decision-making and control" in relation to the trust's financial position and planning.

It added that the board was "failing properly to take steps to reduce the risk of non-compliance".

And it warned that unless the trust showed a steady financial improvement, it would be "liable to further formal action by NHS England".

It added: "This could include requiring the licensee to remove one or more of its directors and/appoint one or more interim directors."

The letter used figures from November 2024, which showed a deficit of £42.1m.

Hospital trust board papers for a meeting today indicate that there has been an improvement and this is now down to £17.7m - but that is against a planned deficit of £2.5m.

Many of the efficiency savings already in place have been hard-won.

In January it was announced that the 24-bed Cuerden ward at Chorley Hospital would be shut down in March. It had been opened just three years earlier.

In March it was announced that Finney House, a 64-bed care home run by the Royal Preston Hospital, would shut to save money.

The home made national headlines when it opened just over two years earlier as an innovative way to free up hospital beds.

The trust also struggles with poor building infrastructure, which particularly impacts the Royal Preston Hospital.

Under the New Hospitals Programme, both sites were supposed to be replaced by a new building by 2030.

But in January this year it was announced that work would not even begin until 2035.

A recent independent review by the Good Governance Institute found that the trust "has many strengths that should help it to overcome a period of difficulty".

It added: "These strengths include capable leadership, a dedicated workforce and an improvement culture backed up by plans and systems.

"There is evidence of early progress in many areas."

A statement from Lancashire Teaching Hospitals Trust said: "Throughout the year, the trust has been working hard against its robust and comprehensive plan to address and resolve longstanding financial performance issues.

"We welcome the support we have had and continue to receive from NHS England."

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