Financial problems blow hole in plans for NHS trusts

Of those trusts in England yet to achieve foundation status, 80 per cent face financial difficulties, 65 per cent have quality and performance problems and 39 per cent are tackling organisational and leadership issues.

Today’s National Audit Office (NAO) study said some financial problems were long-standing, with some hospitals too big compared with local demand for care, and in some cases major reconfigurations would be needed.

Others faced difficulties due to a huge efficiency drive to save nearly £20bn by 2015 and some were burdened with the huge costs of private finance initiative (PFI) hospital-building schemes.

The report said 20 trusts – nearly half in the London area – “face such substantial problems that they have recognised they are not financially or clinically viable in their current form”.

It is thought some will get financial bailouts and others will face mergers with other trusts – among them the Scarborough trust which is set to link up with York.

Some 70 per cent of NHS trusts in Yorkshire have become foundations but six others are still to do so including the hospital trusts in Leeds, Hull and the Wakefield-based Mid Yorkshire, which has been given one of the longest deadlines in the country to apply for foundation status by April 2014. Others include Yorkshire Ambulance Service, Bradford’s care trust and a new trust in Leeds running community services.

A review of 22 trusts with major PFI schemes has identified up to six for which the scale of debt repayments, together with other financial problems, mean that they are not viable.

NAO head Amyas Morse said the problems would need to be tackled “head on if high quality and affordable health services are to be available to all”.

“Many of their problems stem from long-standing issues around financial viability, underlying performance and clinical quality,” he added.

Health Secretary Andrew Lansley, who put a moratorium on all major hospital reconfigurations planned by Labour on taking office, said: “Labour burdened some of our hospitals with PFI deals they cannot afford, allowed years of bailouts to snowball into huge debts and turned a blind eye to poor performance and quality. Tough solutions may be needed but we are determined to help these hospitals overcome their problems.”

NHS Confederation deputy chief executive David Stout said the Government needed to set out how the major reconfigurations required would be carried out.

“This needs to be done quickly as time is running out. Otherwise services will either go bust or care standards will slip,” he said.