MPs hear evidence of serious financial problems in eleven NHS foundation trusts

Posted: 21/09/2012

On Tuesday of this week, the House of Commons Public Accounts Committee heard evidence that eleven NHS foundation trusts were in serious financial problems.

David Bennett, chief executive of Monitor, the Government's independent regulator of NHS-funded health care services, told the Committee that eleven NHS foundation trusts would not have achieved foundation status if they had applied today. The trusts concerned are: Burton Hospitals; Derby Hospitals; Gloucestershire Hospitals; Heatherwood and Wexham Park Hospitals; Medway; Mid Staffordshire; Milton Keynes Hospital; Peterborough and Stamford Hospitals; Queen Elizabeth Hospital Kings Lynn; the Royal National Hospital for Rheumatic Diseases (Bath); and Tameside Hospital.

Mr Bennett told the Committee on Tuesday that Heatherwood and Wexham Park Hospitals was discovered to be ‘in significant breach of its terms of authorisation because of poor finances’ two years after being given foundation trust status. In the case of Mid Staffordshire NHS Foundation Trust (whose uncertain future we highlighted last week) Mr Bennett said ‘we clearly got it wrong…’ in giving foundation trust status to this trust.

Mr Bennett went on to tell the Committee that following Monitor's review of financial plans for the next financial year, a further thirteen foundation trusts may have serious problems. Specialist teams would now be sent in to the thirteen foundation trusts identified as at risk.

Mr Bennett said that the impact of Public Finance Initiatives, or PFIs, was responsible for the financial difficulties of one of the eleven foundation trusts in serious financial problems (Peterborough and Stamford) and one of the thirteen trusts now under review (Sherwood Forest Hospitals.) The Committee also discussed the plight of South London Healthcare NHS Trust which became the first NHS Trust to be put into administration, in July of this year.

The Committee, which was taking evidence on the NHS's financial resilience, also heard from the NHS chief executive, Sir David Nicholson and the Department of Health permanent secretary, Una O'Brian.

In a statement issued after the Committee, Monitor said that the decisions to place the eleven foundation trusts in significant breach of their terms of authorisation on financial grounds had taken place over the last three years. This meant that Monitor had already ‘stepped in to demand improvements in financial governance, and help the trusts draw up turnaround plans to avert failure and achieve financial stability’. The trusts involved represented less than one in ten of the 144 trusts holding foundation status.

Camilla Wonnacott, a solicitor/case manager in Penningtons’ clinical negligence team, said the financial stability of all NHS trusts, with or without foundation status, is of paramount importance in maintaining the quality of NHS healthcare services.

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