£1.5bn bailout for seven NHS trusts

The Government has announced a £1.5 billion bailout for NHS trusts suffering serious financial problems.

Seven hospital trusts have been identified as the most likely to need extra cash to relieve major financial pressures.

The trusts will need to meet four "key tests" before receiving funding from a pot of up to £1.5 billion over 25 years.

Health Secretary Andrew Lansley said some parts of the NHS had been left with a "dismal legacy" of private finance initiative (PFI) schemes from Labour, which left them struggling with huge debts.

In December, the Commons Public Accounts Committee said four out of five NHS trusts are struggling to become foundation trusts due to financial problems.

Of those trusts in England yet to achieve foundation trust status, 80% face financial issues, 65% have quality and performance problems and 39% are tackling issues over governance and leadership.

Some financial problems are long-standing, including the costly PFI schemes.

A report from the National Audit Office (NAO) in October also found trusts are struggling due to the Government's efficiency drive, which means the NHS must find up to £20 billion of savings by 2013/14.

The Government has already scrapped a deadline for trusts to achieve foundation trust status by April 2014.

However, it expects the majority of NHS trusts to become foundation trusts by April 2014, either on their own or through merger, with all expected to do so "as soon as clinically feasible".

Some 20 trusts said late last year they are not viable in their current form - half were in London.

Today's package of support is aimed at NHS Trusts with historic PFI arrangements who are unable to demonstrate long-term financial viability.

The four key tests for trusts are: the problems they face should be exceptional and beyond those faced by other organisations; they must be able to show that the problems they face are historic and that they have a clear plan to manage their resources in the future; they must show that they are delivering high levels of annual productivity savings; they must deliver clinically viable, high quality services, including delivering low waiting times and other performance measures.

Mr Lansley said: "Labour left some parts of the NHS with a dismal legacy of PFI, and made them rely on unworkable plans for the future.

"They swept these problems under the carpet for a decade, and left us with a £60 billion post-dated PFI cheque to deal with.

"The problems facing some parts of the NHS left to us by Labour now have to be sorted out.

"Tough solutions may be needed for these problems, but we will not let the sick pay for Labour's debt crisis."

Mr Lansley said he was determined to end the practice of giving NHS trusts cash "on the quiet".

He said: "We have already signalled that we are determined to end these backroom deals by bringing greater transparency and openness to the process.

"We need to balance the accountability of the NHS at local level to live within its means on one hand, with recognising that there is a legacy of debt for some trusts with PFI schemes.

"And we need to be certain that those NHS trusts that face historic financial problems are not taking their eye off the most important issue of all - maintaining and improving their frontline patient care."

The seven trusts identified for help are:

* Barking, Havering and Redbridge University Hospitals NHS Trust

* Dartford and Gravesham NHS Trust

* Maidstone and Tunbridge Wells NHS Trust

* North Cumbria University Hospitals NHS Trust

* Peterborough and Stamford Hospitals NHS Foundation Trust

* South London Healthcare NHS Trust

* St Helens and Knowsley NHS Trust

PA