News Shopper investigates financial meltdown of South London Healthcare NHS Trust (From News Shopper)

News Shopper investigates financial meltdown of South London Healthcare NHS Trust

2:00pm Tuesday 26th June 2012 in Health News

Health Secretary Andrew Lansley

The financial crisis affecting our local hospitals reached its lowest ebb this week with the news that the trust is the first in the country to be faced with administration. ROBERT FISK, MARK CHANDLER and KELLY SMALE find out more.

SOUTH London Healthcare NHS Trust (SLHT) is set to be put in special measures as Health Secretary Andrew Lansley seeks to turn around its dire finances.

The trust, which runs the Princess Royal University Hospital in Farnborough, Queen Mary's Hospital in Sidcup and the Queen Elizabeth Hospital in Woolwich, has been criticised over standards of care and has run up debts of more than £150 million over the past three years.

Its chief executive was informed last night (June 25) that the trust is likely to be put into the "unsustainable providers regime" introduced by the last Labour government but never before used.

Mr Lansley sent a letter as the first step in the legal process towards installing a special administrator using the powers.

If an administrator is installed they will take over the board and recommend measures to the health secretary to put the trust's finances on a sustainable basis.

The announcement about the threat of administration came less than a fortnight after SLHT announced its chief executive Dr Chris Streather is stepping down next month (July).

Emergency meeting

Jo Johnson MP held an emergency meeting with the health secretary on Monday night following the news about administration.

The trust, which has been losing £1m a week, is set to be the first in the country to be put under the control of a special administrator tasked with putting it on a viable footing.

Mr Johnson said: “It has been abundantly clear for some time that the trust structure is failing.

“Saddled with dud PFI contracts, SLHT has significant financial challenges, adding to a historic debt of £150 million at the rate of £1.3m each week.

“This is money straight out of the pockets of patients.

“History shows that trusts with weak finances eventually also underperform clinically and Health Secretary Andrew Lansley is right to head that off now before it happens with SLHT.”

He added: “I had an urgent meeting with the health secretary and sought assurances that there would be no asset-stripping or any rushed attempt to balance the books."

"Sad inevitability"

OLD Bexley and Sidcup MP James Brokenshire said the announcement was "more of a sad inevitability than a surprise".

He said: "It’s been clear for some time that the South London Healthcare Trust simply isn’t sustainable and remains burdened with debts it can’t repay.

"At its creation SLHT was saddled with onerous PFI contracts and a historic debt mountain inherited from its predecessor organisations."

He added: "Unsustainable finances risk leading to unsustainable services so it is right that the Health Secretary has taken firm action now rather than allowing the situation to drift."

"Trust has to be broken up"

BEXLEYHEATH and Crayford MP David Evennett said: "I welcome the action taken by the Secretary of State as this situation has gone on for far too long."

He added: "I think we now have a real opportunity to ensure that Queen Mary's Hospital has a viable and sustainable future, providing important services and treatments for Bexley patients.

"In order to achieve all this, the Trust has to be broken up."

"An uphill battle"

Bob Neill MP said: “This is yet another example of how taxpayers and patients continue to suffer from the mess bequeathed by the last Labour Government.

"It saddled South London Healthcare Trust with two botched PFI contacts, and the Trust has since faced an uphill battle trying to return a degree of financial stability to the local health economy.

"With standards of care still well below par, and debts continuing to rack up by over £1m every single week, the health secretary is absolutely right to intervene and find a long-term fix to these inherent problems.”

The view from the unions

Senior organiser for the GMB union Rob Macey said hundreds of members have already called in with concerns about the possibility of staff cuts, the closure of services and facilities being hived off to the public sector.

He said: "The decision to call in administrators is nothing short of disgraceful.

"If the Trust is dissolved there will be devastating consequences for both patients and staff.

"It cannot be right that we have a Government that is prepared to bail out the banks but not our NHS."

And UNISON's regional organiser for the Trust, Carol Shorter, said "Since it's formation in 2009, this Trust has had a PFI millstone about its neck.

"Today, that millstone has finally weighed it down.

"Poor management of the 3 legacy Trusts prior to the merger has also played a part in today's picture."

She added: "PFI is no longer relevant or effective, and South London Healthcare Trust is proof that there should now be an end to the scheme.

"There needs to be a return to conventional procurement, which will ensure a more efficient, flexible and cost effective way of building public assets, such as hospitals."

"The staff at the Trust have worked tirelessly to turn things around, despite facing numerous reorganisations, which are still ongoing.

"They have woken today to startling news, but despite this, they will be at work caring for their patients and doing the jobs that they love; for them, it's business as usual."

Thoughts from campaigners

John Hemming-Clark, from Independents to Save Queen Mary’s Hospital, said: "A hospital going bust is the sort of announcement we expect from a third-world country where some crackpot dictator has siphoned off all the foreign aid relief for his and his cohorts’ personal gain, not what we expect to happen in this country where the dictator (i.e. South London Healthcare Trust) that is siphoning off a billion pounds of taxpayer’s money, via a Private Finance Initiative contract, to the bankers and their cohorts over a 30 year period."

South London Healthcare Trust Patients’ Council member Ron Brewster told News Shopper: "The ship sunk a little while ago.

"It is obviously going to affect patients.

“It's affected patients already at Queen Mary's.

"Queen Mary's is one of the things that has got to come out of that equation.

“Then they really have to look at Princes Royal and take a very close look at Queen Elizabeth and get their finances sorted out.

"Then you could say after a couple of years whether or not there has to be more drastic change.

“There's far too much red tape in the NHS."

Chairwoman of campaign group Keep Our NHS Public Frances Hook, who held a protest outside Queen Elizabeth Hospital this morning (June 26), said her group had been campaigning against the use of PFI to rebuild the hospitals since the 1990s.

She said: “We warned that this would be like a mortgage, we’d be paying far more back than it cost to build and it would eventually collapse.”

“To put two PFI hospitals together was a disaster waiting to happen.

“The people of the three boroughs concerned were never really consulted on it.

“Even A Picture of Health went through regardless that the biggest percentage of respondents to that consultation didn’t want any of it.”

And health campaigner Julie Mott is worried what effect entering into the ‘unknown’ will have on patients.

Mrs Mott, of Red Cedars Road, Orpington, said: “I’m not sure administration will be the best solution.

“We are in no-man’s land because this has never happened before with a health trust and I do not know what the consequences will be.

She said: “I think management change is needed and if the only way they can do that is administration then that’s what it will have to be.

“Because we are in an unknown territory I do not know whether it will be a good thing or a bad thing.

“All I know is I don’t want to see patients suffer for it and it does make you wonder whether this was in the offing because of Chris Streather’s resignation."

'Horrendous'

Retired consultant orthopaedic surgeon Alfred Franklin is wondering what took the health secretary so long to take this action.

He believes the management has to be kicked out and the administrator has to be brought in.

Mr Franklin, of Cumberland Road, Bromley, said: “I think the mess there is horrendous.

“The people who run the trust for the last few years have not shown any degree of competence and have not shown the courage to walk away when it was revealed to be a disaster.

“The current management is reviled by the staff.

“There are lots of good people in the hospital that are doing a decent job in impossible circumstances.

“I’m sure getting out of the mess won’t be easy but this situation cannot go on.

“It is a total mess and it puts at risk the health of about a million people in south east London.

“I retired last summer because they told me to go when I reached 65 and I said ‘what makes you think I want to stay?’”

What the trust says

The Trust says services will continue as normal for patients while discussions are taking place with the health secretary.

A SLHT spokesman said: "Our staff have worked hard for patients and in spite of significant financial issues we are extremely proud we now have among the lowest mortality and infection rates in the country.

"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 our staff will continue to provide services as normal."