07 January 2005
The troubled Bradford Teaching Hospitals Foundation Trust has withdrawn its threat of legal action after a plea from the chair ousted by the regulator, Monitor.
John Ryan was sacked in December after Monitor discovered the trust could run up debts of £11m this year – it had forecast a surplus of more than £2m when it was awarded foundation status last April.
The board threatened a judicial review of the sacking but Ryan said further expense and uncertainty would not be in the trust's best interests during such a difficult period.
'I remain shocked by the decision to remove me, as it follows four-and-a-half years of success and is less than nine months into a new era which is seeing the most radical change in funding arrangements and relationships ever seen in the NHS,' Ryan said.
The trust confirmed it would not take legal action and said it would now 'move forward' with interim chair Peter Garland, who was appointed by Monitor for six months.
The introduction of the payment by results (PBR) regime has contributed to Bradford's financial uncertainties and is causing problems for would-be foundations.
This week, Monitor awarded foundation status to five other trusts, but four withdrew their applications and two had theirs deferred by the regulator.
It is understood the problems were caused by fears about the effects of PBR on trusts' future incomes, underlying debts and higher than expected costs, for example from the new consultant contract.
Concern about the finances of NHS England will be heightened by a joint report from the Audit Commission and the National Audit Office in the next few weeks, which is expected to show that 107 NHS organisations failed to break even in 2003/04.
The Department of Health and Monitor have insisted that they are committed to the foundation initiative and that this week's announcement does not represent a slow-down in its implementation.
The five new foundation trusts – Barnsley, Chesterfield, Gateshead, Harrogate and South Tyneside – bring the total to 25. The regulator is assessing ten further applications that it hopes to authorise by April 1.
PFjan2005
