Third of hospitals crippled by debt, MPs warn
A third of hospital trusts are in financial difficulty and may never achieve foundation status, MPs have warned.
Many hospitals are suffering because they are saddled with large private finance initiatives (PFI) deals that means they are effectively heavily 'mortgaged' and have large debts Photo: ALAMY
7:00AM GMT 15 Dec 2011
1 Comment Dozens will have to merge or be broken up, meaning that services will be cut and patients forced to travel further to neighbouring hospitals, the public accounts committee has found. Some could even be forced to close.
Andrew Lansley, the Health Secretary, blamed the “dismal legacy” of private finance initiative bills and “inadequate leadership,” which had left trusts flailing under unsustainable debt. Ministers had hoped all NHS hospital trusts would become foundation trusts by 2014, allowing them greater freedom.
But the MPs found that around four in five of the 113 trusts which have not yet achieved foundation status were in financial difficulty. And 20 hospital trusts have declared that they will never be able to meet the tough financial conditions required by the Government, meaning they will be merged or broken up.
The committee warned that that would “inevitably reduce the range of services provided by some hospitals”. Half of the trusts who said they could not make the foundation status are in the capital. “Nearly half of all hospital trusts have not yet achieved foundation trust status,” said Margaret Hodge, chair of the committee.
“The Government wants almost all trusts to do so by 2014 and this is clearly a very tall order.
“The Department [of Health] reassured us that none of the trusts’ current plans involve closing hospitals, but some trusts are in such a poor financial state it is difficult to see why other organisations would want to take them on.”
Many hospitals are suffering because they are saddled with large private finance initiatives (PFI) deals that means they are effectively heavily “mortgaged” and have large debts.
Earlier this week, the Kings Fund think tank warned that patient safety was being put at risk because hospitals are under an unsustainable financial burden.
Chris Ham, chief executive of the fund, said: “The report once again highlights the severe financial and clinical problems facing some hospitals.
“Our own report published earlier this week shows that these problems are particularly acute in London where much needed service changes have been delayed as a result of the Government’s health reforms.”
The study follows a report in October from the National Audit Office which said many NHS trusts in England are struggling to become foundation trusts due to financial problems. Foundation trusts were created under Labour in 2004 and so far 139 hospitals have achieved the status.
Of 113 still to go, four out of five have financial problems, 78 per cent have strategic issues and two-thirds have performance and quality problems, the report said. The Government has promised to help a small number of trusts to repair their situation but said it would only be in exceptional circumstances.
Mr Lansley said: “The report by the committee confirms that Labour left some parts of the NHS with a dismal legacy of PFI bills, hidden bailouts, and in some cases inadequate leadership to face these challenges and those of the future. While there are plenty of top performing trust boards, we are determined to root out poor performance by shining a light into every area of the service.”
Many hospitals are suffering because they are saddled with large private finance initiatives (PFI) deals that means they are effectively heavily “mortgaged” and have large debts.
Earlier this week, the Kings Fund think tank warned that patient safety was being put at risk because hospitals are under an unsustainable financial burden.
Chris Ham, chief executive of the fund, said: “The report once again highlights the severe financial and clinical problems facing some hospitals.
“Our own report published earlier this week shows that these problems are particularly acute in London where much needed service changes have been delayed as a result of the Government’s health reforms.”
The study follows a report in October from the National Audit Office which said many NHS trusts in England are struggling to become foundation trusts due to financial problems. Foundation trusts were created under Labour in 2004 and so far 139 hospitals have achieved the status.
Of 113 still to go, four out of five have financial problems, 78 per cent have strategic issues and two-thirds have performance and quality problems, the report said. The Government has promised to help a small number of trusts to repair their situation but said it would only be in exceptional circumstances.
Mr Lansley said: “The report by the committee confirms that Labour left some parts of the NHS with a dismal legacy of PFI bills, hidden bailouts, and in some cases inadequate leadership to face these challenges and those of the future. While there are plenty of top performing trust boards, we are determined to root out poor performance by shining a light into every area of the service.”
