South London Healthcare becomes first NHS Trust EVER to go into administration as debts spiral out of control
Health Secretary says the ground-breaking decision is in the interest of patientsTrust is struggling to pay off Labour-agreed PFI deals costing 61m a year in interest

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UPDATED:

13:01 GMT, 12 July 2012

An NHS hospital trust losing 1m a week has been put into administration to try and stop it collapsing, the Department of Health said today.

Health Secretary Andrew Lansley has appointed a trust special administrator to try and turn around the struggling South London Healthcare NHS Trust.

Queen Elizabeth hospital in Woolwich is one of three that makes up the South London Healthcare Trust

Queen Elizabeth hospital in Woolwich is one of three that makes up the South London Healthcare Trust

Mr Lansley said: 'I have decided it is in the interests of
the health service and, in particular, of the patients the trust
serves.'

The Trust has been put on an 'unsustainable providers regime' and the government has appointed Matthew Kershaw with the task of putting it back on a 'viable footing.'

Mr Kershaw currently works as the national director for provider delivery at the Department of Health. He will take over the Trust's board on Monday July 16 and recommend measures to Mr Lansley at the start of next year.

The chairs and directors have been informed that they have been suspended from board duties.

It is the first time in NHS history
that a trust has been forced to hand over its administration powers to the
Department of Health after failing to meet prescribed standards.

New appointment: Matthew Kershaw is the special administrator

New appointment: Matthew Kershaw is the special administrator tasked with sorting out the Trust

The
Trust was only created in 2009 after the merger of three hospitals –
the Princess Royal in Orpington, Queen Mary's in Sidcup and the Queen
Elizabeth in Woolwich.

Yet it has gone 150m in the red over the past three years largely because of crippling Private Finance
Initiative deals agreed by the last Labour government. The two PFI deals are now costing 61million a year in interest.

Last year's deficit, paid off by money from elsewhere in the NHS budget, could have paid for 1,200 nurses or 200 hip replacements a week.

The Health Secretary stepped in after
draft financial plans showed the trust would have a deficit of
30-75million a year for the next five years, despite efforts to tackle
the situation.

Today he said: 'Past efforts have not succeeded in putting the South London Healthcare Trust on a sustainable path.

'This will be a big challenge and my key objective for all NHS Trusts is
to ensure they deliver high-quality services to patients that are
clinically and financially sustainable for the long term.

'The purpose of the trust special administrator is to ensure that
services are high quality and to ensure a lasting clinical and financial
solution.

Health secretary Andrew Lansley said the ground-breaking decision was in the interest of patients

Health secretary Andrew Lansley said the ground-breaking decision was in the interest of patients

'Although there have been some improvements in mortality rates,
maternity services and infection control, and some early signs of
improvements in waiting times, they do not go far enough. It will be
impossible for South London to build on these improvements while
tackling such a large deficit.

'Matthew, working with clinicians, all other staff, commissioners,
patients, the public and other stakeholders, must now drive the changes
and shape a sustainable solution for South London Healthcare NHS Trust
and the local health economy.

'I am confident that with the regime I am enacting today in place, and
working extensively with clinicians, health service leaders, patients
and local people, Matthew will have the tools and framework in place to
find a long-term satisfactory solution for the people of south east
London.'

Mr Kershaw will first publish a report on October 29 after examining the Trust's long-standing difficulties. He will then launch a 30-day consultation with staff, patients and public on a draft report. A final report will be sent to Mr Lansley on January 8, 2013.

Mr Kershaw said: 'My priority is to work with staff, patients, the public and all those involved in healthcare services in the south east London area to maintain high quality, effective services during the running of the Unsustainable Provider Regime.

'This means developing recommendations that ensure that people in south east London can access high quality, safe, and financially sustainable NHS services for the long-term.

'Together we will need to think differently, be bold and accept that change needs to happen. The status quo is not sustainable.'