55.1 The committee welcomed Deborah Lee, Chief Executive Gloucestershire Hospitals NHS Foundation Trust (GHNHSFT) and Keith Norton, (newly appointed) Non Executive Director (GHNHSFT), to the meeting to inform and engage with members on this matter.
55.2 Ms Lee acknowledged that the position the Trust found itself in reflected that there had been a failure of financial governance; and had the Trust, the regulators and auditors acted differently the Trust would, in all probability, not be in this position today. She informed the committee that the sudden nature of the announcement appeared to have given rise to the misconception that this situation had developed ‘overnight’, and she wanted to be clear that the financial deterioration had in fact developed over time but the awareness of the underlying position had only just become apparent. The announcement had been preceded by an independent high level review, commissioned by the Trust Board, of the Trust’s financial position and reporting arrangements.
55.3 She further explained that this review had highlighted that there was an insufficient level of financial skills and expertise across the Trust’s Non-Executive Directors (NEDs) when compared to many similar organisations. However, it was important to note that an externally commissioned review of the Board’s arrangements in 2015 had not raised this as an area of concern. It was explained that changes to the Trust Board have already been made; and the committee was assured that the person specification for NEDs reflected a requirement for financial expertise.
55.4 The committee was aware that the Trust had arranged a loan (£26m) through the Department of Health to strengthen its immediate cash position. The committee was informed that the Trust was required to submit a recovery plan to NHS Improvement in advance of the first Progress Review Meeting (PRM); and that this PRM would take place on 1 December 2016 and involved key members of the Trust Board. Ms Lee anticipated that it would take at least 24 months to get the Trust back into a position of financial security.
55.5 Members of the committee were clear that it was disappointing that the Trust found itself in this position; and that the committee would be taking a close examination of the findings of the current investigations into this situation. Members were clear that the investigation report must be published un-redacted in the public domain. A particular concern was whether this situation would impact negatively on the delivery of services to the people of Gloucestershire.
55.6 The committee was informed that the report would be published in the public domain and be un-redacted. The people of Gloucestershire would see a continuation of services; the challenge would be to do things better and more efficiently. It was also noted that the Gloucestershire Clinical Commissioning Group (GCCG) commissioned the Trust to deliver services and the Trust must deliver them.
55.7 Members questioned the role of the internal and external auditors in this process; was it not their role to identify this issue? It was explained that the auditors (internal and external) would be interviewed as part of the investigation.
55.8 The committee would receive the outcome of the investigation at an extraordinary meeting on 30 January 2017. (Post meeting note: this meeting has been deferred. Due to unavoidable delays in the Trust and regulator assurance processes, earlier publication is not now possible. It is expected that the committee will receive this report in March 2017.)