By Vivienne Russell | 26 June 2012
South London Healthcare NHS Trust could go into administration after ministers took action over its spiralling debts.
The trust, which operates three hospitals in Woolwich, Orpington and Sidcup, has accumulated debt of £150m, and is generating further debt at a rate of £1.3m a week, the Department of Health said.
Health Secretary Andrew Lansley is considering using powers included in the 2009 Health Act to send in a special administrator. Under this process, the trust board’s chair and directors would be suspended with the special administrator assuming their powers. The administrator then has 45 days in which to prepare a draft report for the secretary of state setting out what action needs to be taken. The administrator may recommend that the trust be dissolved and its services transferred to other trusts.
South London Healthcare inherited large debts when it formed in 2009. Many of these related to servicing Private Finance Initiative contracts at the Woolwich and Orpington sites.
A DoH spokesman said the long-standing financial problems at the trust should not be allowed to continue to compromise patient care.
‘While the trust has made progress in recent years, it continues to fail on several important measures of performance for patients, including waiting times,’ he said.
‘That situation cannot be allowed to continue, which is why we are considering options for how the trust is managed in the future. One of those options is to enact the Unsustainable Provider Regime, which was set out in the 2009 Health Act, for poorly performing NHS trusts.’
In a statement, the trust said its priority was to ensure its ‘longstanding and well-known financial issues’ were resolved.
‘Our staff have worked hard for patients and in spite of significant financial issues, we are extremely proud that we now have among the lowest mortality and infection rates in the country,’ the trust said.
‘We expect these discussions to come to a conclusion in the second week in July when a decision will be taken by the secretary of state. In the meantime we can reassure local patients and the public that our staff will continue to provide services as normal.’
Sue Slipman, chief executive of the Foundation Trust Network, welcomed the government’s intervention. ‘The health service is under enormous financial pressure at the moment. There is no doubt that there will have to be more changes in the health service In order to make the savings necessary to invest in new patterns of health care,’ she said.
Slipman added that South London provided a test case for how well the DoH’s special administration scheme works. ‘This will not be the last time that the failure regime will be brought into play, but we should also remember how well so many NHS trusts have performed when faced with the need to make punishing financial changes in services,’ she said.
South London Healthcare NHS Trust could go into administration after ministers took action over its spiralling debts.
The trust, which operates three hospitals in Woolwich, Orpington and Sidcup, has accumulated debt of £150m, and is generating further debt at a rate of £1.3m a week, the Department of Health said. Health Secretary Andrew Lansley is considering using powers included in the 2009 Health Act to send in a special administrator. Under this process, the trust board’s chair and directors would be suspended with the special administrator assuming their powers. The administrator then has 45 days in which to prepare a draft report for the secretary of state setting out what action needs to be taken. The administrator may recommend that the trust be dissolved and its services transferred to other trusts.
South London Healthcare inherited large debts when it formed in 2009. Many of these related to servicing Private Finance Initiative contracts at the Woolwich and Orpington sites.
A DoH spokesman said the long-standing financial problems at the trust should not be allowed to continue to compromise patient care.
‘While the trust has made progress in recent years, it continues to fail on several important measures of performance for patients, including waiting times,’ he said.
‘That situation cannot be allowed to continue, which is why we are considering options for how the trust is managed in the future. One of those options is to enact the Unsustainable Provider Regime, which was set out in the 2009 Health Act, for poorly performing NHS trusts.’
In a statement, the trust said its priority was to ensure its ‘longstanding and well-known financial issues’ were resolved.
‘Our staff have worked hard for patients and in spite of significant financial issues, we are extremely proud that we now have among the lowest mortality and infection rates in the country,’ the trust said.
‘We expect these discussions to come to a conclusion in the second week in July when a decision will be taken by the secretary of state. In the meantime we can reassure local patients and the public that our staff will continue to provide services as normal.’
Sue Slipman, chief executive of the Foundation Trust Network, welcomed the government’s intervention. ‘The health service is under enormous financial pressure at the moment. There is no doubt that there will have to be more changes in the health service In order to make the savings necessary to invest in new patterns of health care,’ she said.
Slipman added that South London provided a test case for how well the DoH’s special administration scheme works. ‘This will not be the last time that the failure regime will be brought into play, but we should also remember how well so many NHS trusts have performed when faced with the need to make punishing financial changes in services,’ she said.
