St George's Hospital is heading for a £5.34million overspend after years of borrowing and no cash to invest in the site.

The hospital's dire financial position was revealed by trust board members this week, when it emerged that the need to borrow from Peter to pay Paul to finance rising costs and patient demand had yet again landed the major teaching hospital in trouble.

For the past two years, deficits in the budget have been off-set by using cash from money promised for capital investment in the next financial year and by selling off property belonging to the trust.

But now the Tooting hospital has reached the end of the line.

The last of its real estate assets will be swallowed up along with cash from next year's capital budget to bail it out of this financial year's mess.

There will be little cash to replace ageing medical equipment, incurring costly repairs instead.

Even with these measures, St George's will have to find another £1million to balance the books, which will see plans for a new surgical unit put on ice and a freeze on replacement office equipment.

Further savings are planned by using less agency staff, which accounted for £274,521 of the £1million overspend on nursing.

Chief executive Ian Hamilton said: "The trust has come under pressure during 2001/2 as a result of the increasing number of patients that it is treating from a wide area. This has led to a potential deficit of £5.34million by the end of the financial year.

"The trust has already taken steps to address the deficit through selling property that is no longer required and borrowing against next year's capital budget. This action has allowed the trust to reduce its deficit to just under £1million.''

However, cash from the Government's national NHS Plan has been used by St George's to refurbish A&E, adding a dedicated paediatric area, and finance plans to extend ear, nose and throat and eye clinics.

It has also received £1.3million to help meet waiting list targets.

November 26, 2001 11:00