Mid Staffs NHS trust not viable, review confirms

17 Jan 13
The troubled Mid Staffordshire NHS Foundation Trust needs to save more than £50m to be financially viable, but could not do so without compromising services, a report for health regulator Monitor has warned.
By Richard Johnstone | 18 January 2013

The troubled Mid Staffordshire NHS Foundation Trust needs to save more than £50m to be financially viable, but could not do so without compromising services, a report for health regulator Monitor has warned.

An examination of the trust by the Contingency Planning Team, a group of external consultants appointed by the watchdog, has concluded it will not be clinically and financially sustainable in the future.

An initial report from the team, which brings together experts from consultancy McKinsey and accountants Ernst & Young, was published in December. This found that Mid Staffs, which currently receives around £20m a year additional funding from the Department of Health, would continue to require extra cash.

Its latest report, published yesterday, concluded that the trust would need to reduce spending by £53m over five years to break even, equivalent to saving 7% of its budget annually. It would also require a total subsidy of £73m from the Department of Health over this period.

However, such cuts would be impossible without compromising the quality of clinical services at the trust’s two hospitals in Stafford and Cannock, the Contingency Planning Team found. Although the trust provided safe care today, the hospitals would find it ‘increasingly difficult’ to support consultants and maintain a high-quality service in the long term.

Monitor said the experts would now consider how services should be provided to meet the needs of patients. This would include assessing whether they can be moved to other providers, and could lead to the trust being placed in special administration.

Stephen Hay, Monitor’s managing director for provider regulation, said the experts had ‘consulted widely in examining whether Mid Staffordshire is sustainable in its current form’.

He added: ‘Now we have the team’s conclusions, it is important that they move forward quickly to find a way to safeguard services for patients in this area.’

The trust said it agreed with the assessment of the Contingency Planning Team.

Chief executive Lyn Hill-Tout said: ‘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.

‘Like many smaller district general hospitals, our services are not clinically sustainable in their current form. This is because medicine has and will continue to become more specialised and smaller hospitals cannot attract or resource the specialist teams and infrastructure required to maintain such services.’

The report comes as the public inquiry into care failings at the trust prepares to publish its findings. The inquiry, chaired by Robert Francis QC, examined why serious problems at the trust between January 2005 and March 2009 had not been identified and acted on sooner.

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