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Mid Staffordshire NHS trust ‘not clinically or financially viable’

By Richard Johnstone | 10 December 2012 

The troubled Mid Staffordshire NHS Foundation Trust is not viable in the long term, a review for hospital watchdog Monitor is set to conclude.

The trust, which runs two hospitals in Stafford and Cannock Chase, is currently being kept going by around £20m in annual additional funding from the Department of Health.

Monitor appointed a team of experts from consultancy McKinsey and accountants Ernst & Young to examine its finances and health services and recommend solutions to ensure it could balance its books.

However, the regulator has today been informed that the Contingency Planning Team is likely to conclude the trust is ‘unable to achieve long-term financial or clinical sustainability in its current form’.

A report, to be submitted in March, will state that even if the trust achieves challenging annual cost savings, the hospitals would be unable to break even without further long-term funding.

The CPT will now work closely with the trust, local commissioners and other health care providers in the Mid Staffordshire area to determine options for long-term provision.

This work will involve deciding how local services can be provided in a clinically and financially sustainable manner, what organisational form this might take and how that might be implemented. The CPT will recommend a solution in its final report to Monitor. 

Stephen Hay, the executive director of provider regulation at Monitor, said: ‘We have always acknowledged that the trust has made significant improvements in clinical standards in recent years. However, the independent experts have now advised us that they are likely to conclude that the trust cannot sustain itself either financially or clinically in the long term.

‘As the team goes on to look at alternative solutions, we at Monitor will work to ensure that local hospital services continue to be available for the benefit of the whole community.’

Responding to the report, trust chief executive Lyn Hill-Tout said the board of the authority agreed with the Contingency Planning Team’s assessment.

She added: ‘We accept that MSFT is not clinically or financially sustainable. The board concluded this was the case earlier this year and had discussed this with our regulator, Monitor. Monitor subsequently set up the review of the trust (using their new powers under the Health & Social Care Act) and the Contingency Planning Team, through further detailed analysis, has now confirmed this.

‘Mid Staffs is not financially sustainable in its current form because, despite all the efforts not only of the trust but of the local health service, we do not have a plan which brings us to financial breakeven by 2015. Similar financial challenges are being faced across the country by smaller general hospitals.’

The first trust to be placed into a special administration regime for troubled hospitals, South London Healthcare NHS Trust, is set to be broken up.

• Also today, Monitor has revealed that a separate Contingency Planning Team will be appointed to devise a long-term plan for the future of the Peterborough and Stamford Hospitals NHS Foundation Trust.

Last month, the National Audit Office concluded that the Private Finance Initiative deal agreed by the trust in 2007 was unaffordable. Now the experts will develop a plan for ‘financial sustainability’ for the trust, which has an underlying annual deficit of about £45m.

The experts will ensure the sustainability of services for patients, in a way that minimises the need for further funding from the taxpayer, Monitor chief executive David Bennett said.

‘We have been working closely with Peterborough and Stamford Hospitals NHS Foundation Trust to improve its financial performance. The reality is that the trust has a significant underlying deficit and even if it achieves challenging annual cost savings it will continue to need substantial financial support from the Department of Health,’ he explained.

‘It is therefore time for us as the sector regulator to step in and look for a solution that ensures services are provided for local patients on a sustainable basis. We have an open mind about the form that solution might take, but it must meet the needs of patients and taxpayers.’



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