In-debt South London Healthcare NHS Trust 'should be broken up'

South London Healthcare NHS Trust, which runs three hospitals in the capital, was the first ever to be placed in administration after it started losing around £1.3 million a week (Getty Images)

A debt-ridden NHS trust which was on the brink of bankruptcy should be dissolved, an official consultation has concluded.

South London Healthcare NHS Trust, which runs three hospitals in the capital, was the first ever to be placed in administration after it started losing around £1.3 million a week.

Special administrator Matthew Kershaw said the trust should now be broken up, with other organisations taking over the management and delivery of its services.

The report, which came after Mr Kershaw was tasked with putting the trust on a stable financial footing last year, recommended any debts should be written off by the Department of Health so new organisations are not "saddled with the issues of the past".

Its recommendations would result in a radical overhaul of services in south London.

This would see the Queen Elizabeth Hospital site in Woolwich come together with Lewisham Healthcare NHS Trust to create a new organisation providing care for the communities of Greenwich and Lewisham.

The Princess Royal University Hospital in Farnborough, near Bromley, would be acquired by King's College Hospital NHS Foundation Trust.

The report stated: "In order to deliver this transformation programme, South London Healthcare NHS Trust should be dissolved and other organisations should take over the management and delivery of the NHS services it currently provides."

Mr Kershaw said South London Healthcare NHS Trust (SLHT) remained the "biggest financial problem" across the NHS.

According to his report - which was presented after no "viable alternatives" were put forward - its hospitals will need to make £74.9 million of efficiency savings over the next three years.

Mr Kershaw added: "I have said consistently that the status quo is not an option, and I believe these final, refined recommendations are the right ones, although I appreciate that some people will find them difficult to accept.

"I do believe that, if implemented fully, they will help deliver safe, high-quality, affordable and sustainable services for the people of south east London into the future."

Dr Jane Fryer, medical director for NHS South East London and medical adviser to the programme, said: "As a practising GP in south east London for 24 years, I believe the recommendations in this final report will ensure our patients receive safe, high- quality care which will simply not be possible if the situation here continues and no changes are made.

"Making changes to emergency, maternity and planned care over the next three years, alongside the important improvements we need in primary care and community services, will deliver a transformation in the NHS locally - a service saving lives and improving health outcomes.

"Clearly, not all clinicians agree with our proposals, but overall I believe by implementing them we can transform the way the NHS delivers services in south east London, improving care for all in a long-term, sustainable way."

The final report has been presented to the Health Secretary who has 20 working days to review its recommendations and make a decision on the future of the NHS in south east London by February 1.

Implementing the recommendations in accordance with the report would cost around £313 million, while the trust's debts are expected to stand at £207 million by March.

Mr Kershaw has called for this figure to be wiped by the Department of Health (DoH).

This would include bailing out massive PFI debts, which use up 16% of trust income.

The DoH should provide around £20 million to £25 million every year until 2020 to cover the excess costs of PFI buildings at the Queen Elizabeth and the Princess Royal until the relevant contracts end, he has advised.

Reorganisation could save around £42 million from the staff pay budget. Previous estimates suggested those savings would include the cutting of 140 medical staff across the trust's three hospitals.

The recommendations include reducing maternity units from five sites to four and developing Queen Mary's Hospital in Sidcup into a "hub" for the provision of health and social care in Bexley.

This would see the abolition of the hospital's inpatient wards in a move that would be expected to deliver annual savings of £4.5 million by the end of financial year 2015/16.

Mr Kershaw also earmarked University Hospital Lewisham's A&E department for closure - even though it does not belong to the struggling trust. The department would be downgraded to an "urgent care" unit.

A DoH spokesman said: "Where trusts face long-standing problems we have been clear that doing nothing is not an option.

"It is crucial that patients in south east London have high- quality health services that will last.

"There isn't an easy solution to the problems at South London Healthcare NHS Trust.

"The Secretary of State has received the recommendations from the Trust Special Administrator which he will carefully consider and will announce his final decision by early February 2013."

PA