South London Healthcare NHS Trust is ‘not sustainable’, and radical changes to services are required, warns District Auditor
In a report in the public interest District Auditor Philip Johnstone says that South London Healthcare NHS Trust is:
‘Not sustainable in its current configuration and requires significant and radical changes to current service provision.’
He adds that hard decisions need to be taken about the Trust’s infrastructure and operational capacity to achieve financial balance, adding that
‘These decisions may be unpopular in the local area.’
In April 2009 South London Healthcare Trust was created by merging three smaller hospital trusts – Queen Mary’s Sidcup NHS Trust, Queen Elizabeth Hospital NHS Trust, and Bromley Hospitals NHS Trust.
It provides NHS health care to south east London, particularly the London Boroughs of Bexley, Bromley and Greenwich. It is one of the largest acute hospital trusts in England, providing healthcare services to a population of more than one million people.
But in July 2012 its Board was suspended when the Secretary of State instigated the Unsustainable Provider Regime (UPR), and a Trust Special Administrator (TSA) was appointed. The TSA currently acts as the Board and therefore Philip’s report should be considered as part of the TSA’s remit.
Philip Johnstone says in his report:
‘The financial problems faced by the Trust are characteristic of an organisation that commenced operation from a weak position.’ He adds: ‘Each of the predecessor trusts was in deficit prior to the merger and the implementation of plans to reconfigure services to address financial problems, clinical need and capacity was delayed. The Trust inherited two expensive PFI schemes, together with poor and disparate management information systems.’
His report notes that the Trust’s financial position has significantly deteriorated since it began in 2009, and that it continues to be dependent on cash support from the Department of Health.
In May 2012 the Department issued an extension to 2013/14 of the Trust’s duty to break even.
But Philip says:
‘My subsequent review of the Trust’s current long term financial plan shows it is very unlikely to meet its statutory financial duties with a forecast cumulative deficit of £254.7 million in 2013/14.’
He notes that the long term financial plan suggests the Trust has exhausted options to identify potential savings large enough for it to break even in the next two years, and that it has limited scope to improve efficiency or reduce costs without addressing its operational capacity and reducing its estate. Options to take further action are constrained by the current terms of the Trust’s PFI contracts.
He concludes that:
‘It is clear that the Trust cannot address its problems in isolation. Actions by one body in the local health economy can significantly affect others and the Trust will need to work with local partners to achieve a sustainable improvement in its financial position.’
Philip adds:
‘As the external auditor of South London Healthcare NHS Trust, it is my professional opinion, therefore, that the financial standing problems of the Trust should be reported to the public, and I issue this report in the public interest under section 8 of the Audit Commission Act 1998.’
Notes to editors
- By 29 October the TSA will publish its own draft report with recommendations, and then consult for 30 working days before presenting the final report to the Secretary of State.
- The Secretary of State is then expected to make a decision on the TSA’s recommendations.
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