Jeremy Laurance explains the far-reaching consequences of yesterday's damning appraisal of Basildon NHS Trust

For the second time in six months, a foundation trust, one of the flagship institutions of the NHS which are supposed to set the gold standard for medical treatment, has been found to be delivering sub-standard care which may have cost hundreds of lives.

The 400,000 people served by the Basildon NHS Trust in Essex will be shocked to learn that the death rate among patients admitted as emergencies to the hospital was almost 40 per cent above the national average, and that when managers were alerted to the problem they failed to deal with it.

A year ago when details of the high death rate were published in the local press, managers insisted it had nothing to do with poor care.

They blamed a lack of hospices in the area which meant that a higher number of elderly and terminally ill people were dying at the hospital than would be expected elsewhere. They also claimed there were mistakes in the statistics.

Alan Whittle, chief executive, told the Basildon Recorder on 19 November 2008: "It is important people understand there is no relationship between the standard of care and the mortality rate. This could really put back the level of confidence that people have in healthcare provision."

Confidence will certainly be damaged now, a year on and with no noticeable improvement in the death rate, as it was at Mid-Staffordshire NHS Foundation Trust when a similarly high death rate linked to "appalling" standards of care was exposed last March.

The latest revelation by the Care Quality Commission (CQC) poses serious questions about the tests which NHS trusts must pass to achieve foundation status and about the regulatory regime across the whole of the NHS which the commission itself operates.

When the scandal at Mid Staffordshire broke last March, Alan Johnson, when he was Health Secretary, announced a review by the National Quality Board of the "early warning system for clinical underperformance" to ensure it was "working effectively across the whole of the NHS".

Basildon was by then already giving cause for concern. Dr Foster Intelligence, the independent organisation which collects NHS performance data, recorded a hospital-wide death rate 36 per cent above the national average for the three years to 2008-9.

Mr Whittle's initial complaint that the death rate statistics were misleading, precisely mirrored that from the trust board at Mid-Staffordshire which at first complained there was a problem with the "clinical codings" and the data could not be trusted.

The CQC initially accepted assurances from Basildon that the problem of the high death rate was being addressed on the strength of a number of impressive-looking action plans to tackle the failings the trust had drawn up. But when the action plans failed to deliver, the CQC began to lose patience. Then a series of other problems emerged – "smaller bushfires broke out across the organisation", according to one source – connected with the care of children, infection control, and the welfare of people with learning disabilities, which left the CQC with no option but to act to protect patients.

Crucially, however, despite the emerging problems, Basildon managed to secure an overall "Good" rating for the quality of its services in the 2008-9 performance tables published by the CQC last month.

That casts serious doubt on the value of the performance ratings and suggests NHS trusts may now be so familiar with the annual check on their performance that they have found ways to meet the standards on paper without doing so in practice.

Basildon NHS Trust was one of the first to be granted foundation status in 2004, awarded on the strength of its clinical and financial performance, which allows it greater freedom to manage its own finances and develop new services.

The tests operated by Monitor, the foundation trust regulator, must now also come under scrutiny after two of its flagship organisations have failed so disastrously to meet the needs of the people they are there to serve – the patients – rather than the demands of a bureaucratic process. If regulation is to be meaningful it must involve real world checks that deliver accurate assessments of performance, not a tick box exercise that tells us nothing of what is really going on.

Case study: 'I just want to warn other people'

A widow described the "awful" standards of hygiene in Basildon Hospital in Essex after her husband died there despite showing initial signs of recovery.

Writing to Daphne Honeyman in 2007, hospital bosses admitted that her husband's Parkinson's medication was not prescribed at the right times. In the letter, the hospital's chief executive Alan Whittle also accepted that staff had lied to Mrs Honeyman, telling her that her husband, George, had not fallen out of his bed while under their care. But Mrs Honeyman later insisted that the letter of apology did not go far enough. Sue Shepperd, Mrs Honeyman's daughter, also said she was appalled by the hygiene standards after her mother found a dusty sweet under George's bed. Ms Shepperd said: "It disgusted me to see my mother on her knees cleaning around the bed."

George Honeyman suffered a heart attack and was diagnosed with having fluid on the lungs after complaining of breathing difficulties. Mr Honeyman, a retired pipe fitter, was treated in Oldchurch Hospital in Romford and, after initial improvement, transferred to Basildon. He died there of pneumonia in 2006. "I just want to warn other people about Basildon Hospital," Mrs Honeyman, of Stanford-le-Hope, told The Basildon Recorder after his death.