CASH strapped Kennet and North Wiltshire Primary Care Trust is to be surcharged £214,000 for not balancing its budget.

The trust finished the financial year (2004/5) with an overspend of £10.158 million. As a result the Avon, Gloucestershire and Wiltshire Strategic Health Authority has imposed a surcharge of £214,000.

This means a total of £10.372million will be carried forward into this year's budget.

Nicola Dunn, the new director of finance at the trust, said it was too early to say what impact this would have on services.

She said: "The trust will have an extra £13.9 million in funding to spend this year but we are still working through the figures. We have to achieve targets and we are in the process of working with the strategic health authority on these."

The trust failed in a bid to claw back £1.3million it felt it was being charged unfairly by the Swindon and Marlborough NHS Trust, which runs the Great Western Hospital in Swindon.

The trust pays the hospital trust for treating patients who live in Kennet and North Wiltshire but in the last year the hospital saw fewer of the trust's patients than it was contracted to do but charged the trust for over performance, amounting to a total of £1.3million. Mrs Dunn said the trust took the last resort of going to arbitration at the Strategic Health Authority but lost and will have to pay the £1.3million.

Mrs Dunn said another Primary Care Trust had negotiated the trust's contract with the hospital last year but from now on the trust would set the contract directly with the hospital, now that the trust has a new board of directors in place.

She said: "It's quite common in the NHS for one Primary Care Trust to act as lead commissioners for other PCTs. We took the decision to dispute the amount charged by the Swindon and Marlborough NHS Trust because the under performance was more significant.

"We also wanted to avoid mismatches in the statutory accounts as debtors and creditors have to balance out. We took it to arbitration and lost.

"This will have no impact on the services we are going to receive as we are now negotiating directly with the Swindon and Marlborough NHS Trust."

The trust lost another claim against a disputed bill. It will have to pay £111,000 redundancy costs for an employee of the Wiltshire Shared Services Consortium because it is based at the trust's headquarters at Southgate House in Devizes. The trust had anticipated all four Primary Care Trusts in Wiltshire would contribute to the costs.

The figures are contained in a finance report to be discussed by the trust's board next Tuesday.

The report also reveals that during the last year the trust made savings of £7 million which included not filling some vacancies and an underspend of £256,000 in drugs prescribing.

The Wiltshire Shared Services Consortium, which provides administration, personnel, training and facilities staff to the four Primary Care Trusts in Wiltshire, is to be disbanded and each trust will take on its own services. A total of 650 staff are employed, about 60 are based at Southgate House, with the rest based throughout Wiltshire. All staff are expected to be redeployed.

Last Thursday Kennet and North Wiltshire and West Wiltshire Primary Care Trusts launched their major review of health services.