Ten NHS trusts in debt crisis

Local MP: Health Secretary Lansley

26 June 2012

Millions of patients in London faced hospital closures or cutbacks today as one health trust neared bankruptcy and nine others were caught in a cash crisis.

Health experts warned that services could be downgraded and patients would have to travel further to get care under sweeping changes to the NHS. Ten other trusts across the country are facing severe financial problems.

Health Secretary Andrew Lansley was pushing ahead with calling in special administrators to South London Healthcare Trust. Dr Chris Streather, chief executive of the trust, admitted its budget was out of control.

Other hospitals in trouble include Newham University Hospital, Barking; Havering and Redbridge; Epsom and St Helier Hospitals; Whipps Cross Hospital; North Middlesex Hospital; Ealing Hospital; North West London Hospitals; Dartford and Gravesham and Surrey and Sussex Healthcare.

The Government blamed the financial turmoil on hugely expensive Private Finance Initiative deals signed under Labour to build or upgrade hospitals. Labour hit back accusing the Coalition of causing the economic mayhem with its reforms.

Health chiefs in North West London last night decided on a “preferred option” to reform services which includes downgrading A&E to urgent care centres, to deal with minor injuries but not major trauma, at Hammersmith, Charing Cross, Ealing and Central Middlesex hospitals.

Chris Ham, chief executive of think-tank the King’s Fund, said the dramatic development at South London Healthcare showed there were “fundamental” problems with the funding of health services in the capital.

He added: “We are still trying to run too many hospitals in relation to funding that we have available.”

South London Healthcare’s finances are said to have crumbled under the weight of a costly PFI scheme and Ealing is also understood to be struggling to cope with its PFI bills.

But a former hospital consultant blamed “incompetence, bullying and maladministration”.

South London Healthcare Trust, which runs Queen Mary’s in Sidcup, the Queen Elizabeth in Woolwich and the Princess Royal University Hospital in Bromley, has been losing £1 million a week and has run up deficits of more than £150 million over three years.

Dr Streather told the Radio 4’s Today programme. “There is a huge gap in our financial plan in order for us to become viable in the long term. This intervention, if it solves that problem which it is designed to do, is absolutely welcome and will be helpful.”

The outgoing chief executive, whose salary was around £200,000 in 2010/11, put the trust’s financial crisis down to local problems such as the need to boost productivity and sell underused buildings, large PFI schemes in Woolwich and Farnborough which he suggested needed an annual subsidy of £21 million a year, and the need for greater sharing of services.

There are claims that one of the three hospitals could close at the trust which is understood to still be on track to lose between £30 million and £75 million a year for the next five years.

Geoff Martin, from health campaign group Health Emergency, said: “Now that the poisonous cocktail of the great PFI rip-off and years of gross mismanagement has leaked out it will spread like wildfire.” Latest NHS figures show that London’s hospital trusts were a net £96 million in the red last year.

Ministers insist the reforms will improve the quality of patient care and are vital to make the NHS able to cope with increasing demands.

They blamed mortgage-style deals introduced by Labour that meant hospitals were built and maintained by private firms on long-term contracts. These “private finance initiatives” are now being held responsible for crippling trusts with unsustainable bills. Sources close to Mr Lansley said South London Healthcare Trust had been “burdened with two unaffordable PFIs worth £61 million a year.”

But former health secretary Andy Burnham accused the Government of dishonesty, arguing that South London Healthcare’s PFI has been started under John Major’s administration.

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