• Health Secretary says the ground-breaking decision is in the interest of patients
  • Trust is struggling to pay off Labour-agreed PFI deals costing 61m a year in interest

By Claire Bates

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An NHS hospital trust losing 1m a week has been put into administration to try and stop it collapsing, the Department of Health said today.

Health Secretary Andrew Lansley has appointed a trust special administrator to try and turn around the struggling South London Healthcare NHS Trust.

Queen Elizabeth hospital in Woolwich is one of three that makes up the South London Healthcare Trust

Queen Elizabeth hospital in Woolwich is one of three that makes up the South London Healthcare Trust

Mr Lansley said: 'I have decided it is in the interests of the health service and, in particular, of the patients the Trust serves.'

The Trust has been put on an 'unsustainable providers regime' and the government has appointed Matthew Kershaw with the task of putting it back on a 'viable footing.'

Mr Kershaw currently works as the national director for provider delivery at the Department of Health. He will take over the Trust's board on Monday July 16 and recommend measures to Mr Lansley at the start of next year.

The chairs and directors have been informed that they have been suspended from board duties.

It is the first time in NHS history that a trust has been forced to hand over its administration powers to the Department of Health after failing to meet prescribed standards.

New appointment: Matthew Kershaw is the special administrator

New appointment: Matthew Kershaw is the special administrator tasked with sorting out the Trust

The Trust was only created in 2009 after the merger of three hospitals - the Princess Royal in Orpington, Queen Mary's in Sidcup and the Queen Elizabeth in Woolwich.

Yet it has gone 150million in the red over the past three years largely because of crippling Private Finance Initiative deals agreed by the last Labour government. The two PFI deals are now costing 61million a year in interest.

Last year's deficit, paid off by money from elsewhere in the NHS budget, could have paid for 1,200 nurses or 200 hip replacements a week.

The Health Secretary stepped in after draft financial plans showed the trust would have a deficit of between 30million and 75million a year for the next five years, despite efforts to tackle the situation.

Today he said: 'Past efforts have not succeeded in putting the South London Healthcare Trust on a sustainable path.

'This will be a big challenge and my key objective for all NHS Trusts is to ensure they deliver high-quality services to patients that are clinically and financially sustainable for the long term.

'The purpose of the trust special administrator is to ensure that services are high quality and to ensure a lasting clinical and financial solution.

Health secretary Andrew Lansley said the ground-breaking decision was in the interest of patients

Health secretary Andrew Lansley said the ground-breaking decision was in the interest of patients

'Although there have been some improvements in mortality rates, maternity services and infection control, and some early signs of improvements in waiting times, they do not go far enough. It will be impossible for South London to build on these improvements while tackling such a large deficit.

'Matthew, working with clinicians, all other staff, commissioners, patients, the public and other stakeholders, must now drive the changes and shape a sustainable solution for South London Healthcare NHS Trust and the local health economy.

'I am confident that with the regime I am enacting today in place, and working extensively with clinicians, health service leaders, patients and local people, Matthew will have the tools and framework in place to find a long-term satisfactory solution for the people of south east London.'

Mr Kershaw will first publish a report on October 29 after examining the Trust's long-standing difficulties. He will then launch a 30-day consultation with staff, patients and public on a draft report. A final report will be sent to Mr Lansley on January 8, 2013.

Mr Kershaw said: 'My priority is to work with staff, patients, the public and all those involved in healthcare services in the south east London area to maintain high quality, effective services during the running of the Unsustainable Provider Regime.

'This means developing recommendations that ensure that people in south east London can access high quality, safe, and financially sustainable NHS services for the long-term.

'Together we will need to think differently, be bold and accept that change needs to happen. The status quo is not sustainable.'

A spokesman for the Royal College of Nursing, said: 'This announcement is an unprecedented step by the Secretary of State and moves the NHS into unchartered waters. 

'It presents a worrying state of affairs for both patients and staff at the Trust, who will be undoubtedly concerned by today’s decision.

'We know that the Trust has been in financial difficulties for some time. However, despite this, frontline staff have continued to do their best for patients, providing a high level of care.'

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If the Trust is declared bankrupt then the contract with the PFI can be torn up and a new one negotiated. Lets hope they play hardball with the PFI contractor and get most of the debt just written off. It's what a PFI company would do if *it* couldn't afford to pay its debt!

if people knew how much money is wasted they would riot...offices have state of the art equipment and more chiefs than indians, the managers are in constant meetings about drivel they have themselves implemented. It is a self perpetuating machine where patient care, nurses and equipment are on the bottom rung. When I worked for a Dr surgery 800 was spent on a messaging system, but then they paid for a training day, another 600 at least, close of surgery for the day and staff on full wages, another few thousand, then a buffet, another couple hundred.....where was patient care? This was funded by tax payer, but a couple of weeks later we ditched the system, it was deemed complicated when we had intercom and paper!

it has gone £150million in the red over the past three years largely because of crippling Private Finance Initiative deals agreed by the last Labour government. The two PFI deals are now costing £61million a year in interest. Just for those who keep saying that the NHS is not safe in Conservatives hands. These deals were donr by the Labour Government. Old but usable wards were pulled down, usually with a bulldozer, and replaced by flimsey buildings that will fall down themselves, (if the weather doesnt finish them.) The cost of rents to these firms will bankrupt the NHS -

Maybe if they cut back on admin staff, managers, directors, and CEOs, board of directors, many millions of pounds would be cut. The cut down on translators, outsourcing cleaning. Then bring back a qualified person to run the hospital AND STOP THE EMPIRE BUILDING, then the hospital maybe able to work as it should - to help those who are ill. Oh yes, charge visitors to Britain for hospital treatment.

The solution is simple, either re-negotiate the terms of the agreement so as to be fair and equitable, or wind up the Trust .

PFI is living on credit cards long term and is utter madness BUT nothing can be done as a contract is a contract and thus any changes wil cost evwn more. Just wait for more Trusts to merge and all the bad debts put together how is this better? All it will do is get ready for the hit team to come in. Look at monitor and all foundation trusts have bad debts and funding problems as they have to make more savings and all hospital trusts must become foundation trusts!!! more madness. We bail the banks out but make Nurses redundant !!! Justwait for the next election and see the real concerns. The NHS will fail and is being forced to be a private company and thus the big private health care companies win. Look at all the A&E depts that are closing and the poor care and never do managers leave!!! why? Sack the useless managers and keep frontline services and this is before the GP'S hold the purse strings!!! Things will only get a lot worse.

Of course Bankrupt the NHS and then say thje only solution are our Private healthcare provider mates, who Care ..for profits not patients...called wool over eyes and I for one dont fall for it. better declare the Trust bankrupt ..no debts paid..then open in new name..that what the rich do with their business's.

Privatisation by the back door. This is the beginning of paying for treatment !!

Yet another thing we can thank Labour for!

The government knew what they were doing when they signed the credit agreement for Pfi hospitals, this hospitals debt crisis will be the first of many, and don't just think its about hospitals.......schools have all been built on the same terms, spending our way out of recession is labours way,yet they spent the last ten years of good times spending other people's money!!!!! We are doomed

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