At least 20 NHS trusts seeking to be self-governing by 2014 are not 'financially or clinically viable in their current form', the National Audit Office has warned.
In an examination of the 113 English trusts applying for foundation status, the NAO also found that 80% had financial difficulties, 65% had problems with quality and performance and 39% with governance and leadership.The government is urging more hospitals to gain foundation status – joining the 139 existing trusts – as part of its plans to increase competition in the health service. But many trusts need to resolve a range of financial, quality, and governance issues before the 2014 deadline, says the NAO report.
The most common problems are financial, with up to six trusts not viable due to the scale of their Private Finance Initiative debt repayments. This follows last month’s disclosure that 22 trusts were at risk due to the scale of PFI repayments.
At least 20 trusts face ‘deep-seated and long-standing’ difficulties in ‘proving their long-term viability’, according to the report, with as many as 48 trusts unlikely to meet Monitor’s criteria without additional work.
It adds that hospitals’ difficulties in achieving foundation trust status are being magnified by the need to save at least 4% a year as their share of NHS efficiency savings. Hospitals would need to have access to £376m worth of loans to meet regulator Monitor’s requirements for working capital, the report added.
The government must now decide how they will deal with hospitals facing the most severe problems, auditor general Amyas Morse said.
‘The Department of Health has made a concerted effort to identify the challenges faced by the 113 NHS trusts seeking foundation status. Many of their problems stem from longstanding issues around financial viability, underlying performance and clinical quality,’ he said.
‘The department will have to tackle these issues head-on if high quality and affordable health services are to be available to all.’
Health Secretary Andrew Lansley said that the report revealed the ‘dismal legacy of challenged hospitals we inherited from the Labour government’.
The government is expected to set out its plans to help the struggling trusts later in the year. Lansley said that he would not ‘sweep these problems under the carpet any longer’.
He added: ‘We welcome the NAO’s findings that we are helping these hospitals in an open and transparent way.For some hospital trusts, the challenges they face may be too great for them to take on alone. Tough solutions may be needed, but we are determined to help these hospitals overcome their problems.’
NHS Confederation deputy chief executive David Stout said that the struggles of trusts to gain foundation status ‘can no longer be ignored’.
He said that radical changes to hospital services would be necessary due to the financial issues. ‘We need to be honest with the public about how difficult this is going to be. We need to persuade them that concentrating specialist services or offering more care closer to home will be better for patients and can save the NHS money.’
