GREAT Western Hospital's trust faces a January cash crunch.

Predictions shared with directors show that GWH currently expects to finish January with a cashflow deficit of £3.3m.

In the worst case scenario, the trust will end January with a £5.6m cashflow deficit.

Accountants hope that discussions with government quango NHS Improvement (NHSI) will result in a longer-term cash support package.

“Cash is something that keeps me awake at night,” Karen Johnson, director of finance at the Great Western Hospitals NHS Foundation Trust, told a meeting of the trust’s board of directors yesterday,

Ms Johnson said that the hospital trust had almost breached cashflow targets set by NHSI that demand they keep at least £1.7m in the bank.

The trust is usually able to take money from a kind of NHS loan – called a working capital facility.

Comparing it to an overdraft, Ms Johnson said: “We were refused by the Department of Health to draw down our working capital facility last month because we still had a surplus of cash in the bank account.

“It is the first time they’ve done that.”

The cash boost block raised fears that the GWH trust would breach the £1.7m cashflow limit.

However, accountants were saved a scare after Swindon Clinical Commissioning Group paid their dues on Halloween – a day earlier than expected.

“In a way it was good, but in another way wasn’t very helpful,” said Ms Johnson. “I sort of wanted to breach.”

She suggested the breach could have helped convince the Government and NHSI that they consider cashflow over too short a time period.

“It doesn’t help us as an organisation,” she said.

Accountants at the trust were now working with NHSI on a longer-term package of support. It is hoped that this could help relieve cash flow fears next year.

Currently, the trust expects to enter January with £1.3m in the bank – and leave it with a deficit of £3.3m

Ms Johnson said: “They absolutely recognise that this trust needs to have some longer-term support and stability.”

She added that the hospital was in a better cashflow position now than it was last year, because they had managed to reduce the number of creditors – companies to which the hospital owed money for, for example, medical supplies.

However, Ms Johnson said that the hospital trust’s creditors were still keen to ensure swift or immediate payment

“It’s been quite alarming the number of suppliers that are threatening to put us on stop or have put us on stop,” she said.

“Now, forget the 30 days payment, they want payment either upfront or within a few days.”

The trust’s overall financial outlook was “very tight”, Ms Johnson said. It is expected that the trust will finish the year with a deficit of £9.6m.

Last month, the trust launched a recovery plan, with all departments asked to find savings of £2.5m.

Chief executive Nerissa Vaughan said that non-clinical job vacancies would be reviewed.

Finance director Karen Johnson suggested that implementing the recovery plan could impact GWH’s performance against key national targets set by the Government, including cancer treatment targets, A&E waiting times and financial objectives.

Despite this, an “optimistic” Ms Johnson said: “I’m positive it is still within our grasp to close this gap down.”

Other hospital trusts in the South West were in a “very much worse” financial position than GWH, she added.