This hospital was pilloried for keeping bodies in its chapel. Now it holds them in 'a cattle truck'

As an indication of the state of the National Health Service, the sign at the entrance to Bedford Hospital yesterday was perhaps as good as any, "Total beds available – Minus 6."

That might seem shocking for a busy hospital with a budget of £70m, but for the staff, struggling to cope with chronic underfunding, it represented progress; within the past two weeks it has read, "Minus 21".

This is the hospital that caused outrage last year when pictures appeared in newspapers of bodies being stored side by side on the floor of a chapel of rest because Dickensian mortuary facilities were full. With the British unfamiliarity with close-quarter death, the sight of somebody's loved ones being handled with such irreverence caused a national scandal. Worse still, the shroud on one of the bodies had apparently been tampered with to reveal the face of a man who had died the week before.

A year on, several NHS scandals later, and the situation at Bedford Hospital has improved little. Bodies are no longer stored in the chapel but neither are they in a much-needed and long-overdue new mortuary. Instead, those the old mortuary cannot accommodate are put in a temporary refrigerated unit described by management as "suitable" but likened by one senior consultant to a cattle truck.

The absence of significant progress, a year after being thrust into national attention, shows that publicising a hospital's deficiencies is no guarantee of solving them. This will come as a warning to the Whittington Hospital in north London, which dominated the headlines last week after a 94-year-old woman was left unwashed for three days.

Bedford Hospital Health Trust's chief executive, Andrew Reed, admitted this week that the "bed state" sign at his site had been at minus 12 and minus 15 several times recently, and patients awaiting treatment had been left on trolleys for more than 12 hours. To compound the feeling of a hospital under siege, it is also facing a bill of £1.4m for a fire alarm system, and a secret structural engineers' report is understood to show that £26m has to be spent to preserve the fabric of the buildings.

After last year's scandal, The Independent discovered internal documents at the hospital demonstrating that pathology staff had been warning of a mortuary crisis for more than quarter of a century. One of the pathology department's "temporary" buildings, housing biochemistry facilities, dates from the 1970s, which has caused two out of four of its disciplines, cellular pathology and haematology, having their accreditation status withdrawn.

Accreditation is not mandatory, but it is an indication of the decay found by independent inspectors from Clinical Pathology Accreditation (UK) who had praised the staff and condemned the conditions in which they had to work. "I feel very sorry for my colleagues in pathology," said Michael Frampton, chairman of the hospital's medical staff committee. "Last year, after the chapel of rest pictures appeared, our acting chief executive, Paul Bowers, said every cloud had a silver lining and this silver lining was that we would get a new pathology department. But so far, there has just been dragging of feet.

"Instead, there is another temporary building. Because the British are unaccustomed to seeing dead bodies, the public was outraged by what happened last year. A lot of it was about preserving the dignity of the dead, but I don't think the temporary mortuary does much to preserve that. Frankly, it looks a bit like a cattle truck. It looks like something that came off the back of a lorry, which is what it is, actually."

Mr Frampton, an ear, nose and throat specialist, and the rest of the hospital's clinicians blame the underfunding of the Bedford area which has gone on for decades. Capitation rates that show where funds should be allocated per head of the population, reveal that the area was underfunded by 3.61 per cent in 1998-99, a position that has deteriorated to 4.4 per cent this year. In all of England and Wales, only one health authority suffers worse underfunding, Kensington, Chelsea and Westminster. In a debate on health services in Bedfordshire in December – there have been four in recent months – the local Labour MP, Patrick Hall, said the hospital was heading for a £3m deficit. In 1997, under Labour, 70 beds were scrapped. They were mainly for the elderly who now occupy beds that would otherwise have been used for patients recovering from illness or surgery.

Mr Hall said: "The problem is lack of resources throughout the health economy, not just with regard to hospitals, which is what the media tend to concentrate on. The rest of the NHS matters very much. I am convinced that if a modernised NHS is to be achieved, which all of us want, it will need to include ... a strengthening of the acute sector [at local hospitals] and the creation of decent community services so a comprehensive and balanced service that puts the needs of patients first is created."

Tomorrow, the first step will be taken in attempts to build new pathology facilities, including a mortuary, when plans drawn up by Dr Lorraine Fitch, clinical director of pathology, and the chief executive, Mr Reed, are put before the Eastern Regional Health Authority. If the £7m plans are approved, the buildings could be in place by mid-2004. If they are not, morale, severely dented last year, is likely to slump again.

"I don't know what a rejection would mean," Dr Fitch said. "Pathology services are vital to a hospital and we need a proper accredited environment in which to work. I simply can't imagine that Region will say no." Mr Reed said he was "quietly confident".

If the pathology construction gets the go-ahead, decades after the need for it was first identified, it might help to erase the terrible pictures of those bodies in the chapel of rest. In the longer term, particularly in the wake of lessons learnt from the Rose Addis scandal in London last week, more money must be spent to raise Bedford from the bottom of the healthcare league..

"We have excellent clinicians and staff to support them," Helen Nellis, chairwoman of Bedford Hospital Health Trust, said. "But until we get fair funding we will spend all our time catching up. If we got proper funding and proper support, this hospital would flourish."

And instead of conjuring up sad images of corpses dumped in a chapel, the words "Bedford Hospital" might come to mean something much more wholesome.

Last night a spokesman for the Department of Health insisted the hospital was receiving more money in real terms since 1997. By 2003, he said, its budget will be double the amount available then. The number of nurses has increased by 75 and the number of doctors by 19. "No one is saying the NHS is perfect," he said. "But it simply is not right to imply hospitals like Bedford are underfunded."