First NHS Trust faces going into administration

Barely a week after Mike Farrer, Chief Executive of the NHS Confederation and former Rochdale Health Promotion Officer warned that the NHS was ‘heading for disaster’, the first NHS Trust in the country faces going into administration ‘within weeks’ and could be dissolved with some services being lost altogether according to Andrew Lansley, the Health Secretary.

South London Healthcare NHS Trust has debts of £69m against an annual turnover of just £42m and has been losing up to £1.3m per week. The Trust which operates three hospitals has been struggling for some time. It was formed only three years ago and had to take on a £2.5bn Private Finance Initiative (PFI) contract for the building of two new hospitals which would become the government’s and taxpayer’s responsibility if the Trust is dissolved under the unsustainable providers regime set up under the last Labour government.

The Trust has some of the worst waiting list times for both surgery and A&E in the country although mortality and hospital acquired infection rates are low.

It is the first NHS Trust in the country to be facing these measures although another 22 Trusts are believed to also be in serious financial difficulties according to a report by the BBC.

Pennine Acute Hospitals NHS Trust, which operates services at the Rochdale Infirmary, is not one of these although it has been under severe financial pressures for some time. Unlike the South London Trust, it has never used PFI contracts. It has, however, been heavily criticised for the almost £4m that it has paid out to management consultants Ernst and Young in order to reorganise services to help reduce its own deficit.

In a letter to the South London Trust, Mr Lansley said: “A central objective for all providers is to ensure they deliver high-quality services to patients that are clinically and financially sustainable for the long term.

"I recognise that South London Healthcare NHS Trust faces deep and long-standing challenges, some of which are not of its own making.

"Nonetheless, there must be a point when these problems, however they have arisen, are tackled. I believe we are almost at this point."

Mr Farrer, speaking for the NHS Confederation said: “"We welcome this decision. The NHS can't go on with short-term fixes to financial problems.

"That might mean some tough decisions, but hopefully will deliver financial sustainability in the long term."

If the Trust goes into administration, the most likely scenario is that its hospitals would be taken over by surrounding hospitals or assimilated into an existing NHS Trust although it is highly probable that at least some of its current services would be lost.

http://www.rochdaleonline.co.uk/news-features/2/news-headlines/70840/nhs-heading-for-disaster-claims-health-boss