East Kent’s hospitals trust is running at a £4 million-a-month shortfall and looks set to go cap in hand for a government bailout, KentOnline can reveal.

A snowballing deficit from £8m to £36m has prompted the trust’s new chief executive to consider asking ministers for “distressed funding”.

In a report to directors, Matthew Kershaw says hospital managers face “critical decisions” ahead.

The trust remains in special measures after health watchdog inspectors condemned its managerial failings and a culture of bullying in 2014.

Despite improvements, Mr Kershaw now admits that it is running at a £4 million a month deficit.

“The trust has drawn down all its available cash balances over the last three years and now faces the prospect of having to seek distressed funding support to maintain its day
to day requirements,” he writes.

“The current monthly run rate of a circa £4m deficit is not sustainable. Sustained improvements must be made to improve this position in as short a time as possible if the trust’s plans are to be regarded as credible by regulators.”

The trust is responsible for Kent and Canterbury, William Harvey and QEQM Hospitals. It also oversees Buckland in Dover and Royal Victoria in Folkestone.

Rampant overspending on increasingly expensive agency staff is identified as a key factor contributing to its spiralling deficit, Mr Kershaw writes.

“The immediate impact of the CQC report in 2014 and the heavy use of the independent sector and weekend working at premium rates to deliver waiting times targets has created a culture where financial issues have taken a back seat to other issues,” he says.

“Finance, quality and safety must enjoy equal consideration in all matters.”

Distressed funding is cash support provided to trusts facing difficulties in meeting day-to-day as well as longer term cash shortages.

Former Green Party parliamentary candidate for North Thanet Ed Targett said: "This is deeply alarming report.

"The failure of the trust's management to get to grips with a massive recruitment crisis is most worrying.

"It is no coincidence that the estimated deficit for this year is nearly the same as the anticipated spending on expensive agency staff.

"They have not been helped by national policy, but how management have let it escalate to the point that it threatens care for people across Kent is beyond my understanding.

"A major shake-up of clinical strategy across Kent is pending.

"Nobody wants to jump the gun until the proposals are out in the open for public consultation.

"But if these numbers are any indication, we should be very worried indeed."

East Kent’s hospitals trust will not seek a bailout for the 2015/2016 financial year, but admits “it is likely” to be required in 2016/17.

Mr Kershaw took over as chief executive of the trust at the start of the year on a £215,000 salary.

He replaced Chris Bown, the interim chief who had been parachuted in on a £290,000 paypacket to help save the ailing trust.