20 NHS trusts are struggling for survival, says spending watchdog

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At least 20 NHS trusts, including 17 major hospitals, are not fit for purpose and must either close, merge or risk being an indefinite drain on the public purse, the Government's spending watchdog has said.

One in five NHS hospitals is struggling to survive in the tough economic climate, according to the National Audit Office (NAO).

Up to a further 30 trusts face severe cash difficulties that make it unlikely they will achieve foundation status giving them independent control of their futures – in line with the Government's ambition for all trusts by 2014.

The grim report spells out for the first time the depth of the crisis in the NHS, which is struggling to maintain too many hospitals in the wrong places, with the wrong specialities and serving the wrong populations.

Andrew Lansley, the Health Secretary, yesterday revealed the 20 most vulnerable trusts, which the NAO deems not clinically or financially viable. The minister claimed they were a legacy of "unaffordable PFI deals", repeated bailouts and neglect by the Labour Government.

It came as the Government cleared a key hurdle in the Lords for its Health and Social Care Bill after a bid by the Lib Dems' Lord Owen to send it for further scrutiny was voted down.

But while his health bill has survived, Mr Lansley (right), faces mounting problems with the NHS on the ground.

They are worst in London where local hospitals, overshadowed by major teaching institutions, have struggled for years to balance their books and now find it increasingly tough as budgets are cut. Almost two thirds of London hospitals are yet to achieve foundation status and many will not do so without closures and mergers to rationalise services.

The difficulties were highlighted last month as Mr Lansley reluctantly approved shutting the A&E and maternity units at North-West London's Chase Farm amid fierce local opposition, 17 years after it was first mooted.

Mark Davies, main author of the NAO report, said: "This process [of achieving foundation trust status] has brought into sharp relief the issues confronting NHS trusts.

"It has yielded up the nettle to be grasped. There are services that are being delivered that aren't good quality and may also be expensive. The process has defined those."