How big is your deficit?

Last week, I co-hosted a webinar with Craig Duncan of Hospice UK to share the results of the analysis of the aggregated management accounts of 66 hospices for the first quarter of 2023/24. The results are stark. 

This exercise is an extension of a smaller one I have been doing with the members of my Virtual Hospice Finance Director's Group for the last couple of years. The fact that around 1/3rd of Hospice UK’s membership participated is encouraging and hopefully the numbers will grow over time. The outputs are an overall summary report, plus an individual one for each hospice which enables them to benchmark their results. The headlines do not make good reading. Combined, to the end of June, the 66 hospices;

• Recorded an actual deficit of £15.6m, though this was well below the budgeted deficit of £23.6m. But this figure is still £10m worse than that for the same quarter last year. 

• 50 of the 66 hospices recorded a deficit for the quarter. For half of these, the deficit was over 10% of expenditure, a substantial figure. 

• Projecting forward, this equates to an average annual deficit of nearly £1m amongst the participants.

• Extrapolated across all independent hospices, this would result in a sector wide deficit of nearly £150 million. This would be easily the worst figure since Hospice UK started analysing aggregated hospice accounts in the early 2000’s. 

Perhaps the most eye-catching figure was that legacy income was down 11% on budget and 27% lower year on year. This comes on the back of previous research which shows pressures on hospice legacy income. Data produced by Legacy Futures for members of the Hospice Legacy Circle shows that the hospice sector’s share of the total legacy market fell from 8.8% to 7.8% between 2018 and 2021.

The results of this exercise clearly show the financial pressures on the hospice sector, alongside other challenges such as rising need and recruitment and retention issues. To receive a copy, contact me.