Debt-ridden NHS trust to be scrapped

South London NHSHealthcare Trust was haemorrhaging around £1m a week

A bankrupt NHS trust with three acute hospitals that serve a million people in London looks set to be carved up between the NHS and private sector, according to controversial proposals revealed today.

South London NHS Healthcare Trust was declared bust and administrators called in three months ago after haemorrhaging around £1m a week to accumulate debts of £150m.

Its three hospitals in south-east London - Queen Mary's in Sidcup, Princess Royal (PRU) in Bromley and Queen Elizabeth (QEH) in Greenwich - have struggled with patient satisfaction and spiralling debt since they were merged into a super-Trust in 2009.

Matthew Kershaw was dispatched to take-over in July by the former Health Secretary, Andrew Lansley, after it became clear that its two hugely expensive private finance initiative (PFI) deals meant the status quo was impossible for the taxpayer to sustain.

Mr Kershaw’s radical proposals, which inevitably have a knock-on effect for neighbouring hospitals, include the merger of the PFI built QEH with neighbouring Lewisham Healthcare NHS Trust with the loss of one A&E department. The PRU could be taken over by King’s College Hospital NHS Foundation Trust or more controversially, its services put out to tender - keeping alive hopes of several private companies hoping for a slice of the franchise.

One of the biggest changes would see Queen Mary's taken over by a mental health foundation trust, Oxleas, and land sold off to the pay off debts. The new ‘health campus’ would no longer provide complex surgery but concentrate on day cases, radiotherapy and endoscopy.

The burden of unsustainable PFI deals on the taxpayer is pulled sharply into focus here as Kershaw calls on the government to pay ‘the excess costs’ of the two PFI hospitals, regardless of their use, until the 25-year contracts expire.

A comprehensive re-organisation of emergency, community, maternity and elective services across southeast London is also recommended.

The proposals come after 39 organisations submitted expressions of interest in taking over some services though none is said to have wanted to take on the whole beast. 

Nine bids have been taken forward for more detailed consideration, though none have been named because of “commercial confidentiality”. Virgin Health, Care UK, Serco and Circle are among the private companies vying for a share of the services.

The Kershaw report said the proposed actions would improve outcomes for patients, resolve the trust’s financial dire straits and more broadly, secure financial sustainability across the wider area.”

The report seems to suggest potential job losses as it says "The trust has the lowest income per consultant in its peer group, a very high ratio of junior doctors to consultant staff and high use of locum and agency staff.”

The controversial plans, which come as the Public Accounts Committee slammed the government's 'on the hoof' approach to dealing with debt-ridden NHS organisations, were cautiously welcomed.

Anna Dixon, director of policy at the King's Fund thinktank, said: "South London Healthcare's problems are complex and longstanding – the proposed solutions recommend very significant change. While the recommendations will undoubtedly be controversial and tough to implement, radical redesign of health services is needed in many parts of the country."

The proposals are out to public consultation for 30 days, with Jeremy Hunt, the health secretary, expected to make a decision early in February.