Government offers bailout to 7 debt-ridden NHS trusts

Afghanistan Sun Friday 3rd February, 2012

LONDON - Seven National Health Services (NHS) trusts, including three in London, have been identified for a bailout from a 1.5 billion pounds government fund to relieve major financial pressures.

The seven trusts identified for help are Barking, Havering and Redbridge University Hospitals NHS Trust, Dartford and Gravesham NHS Trust, Maidstone and Tunbridge Wells NHS Trust, North Cumbria University Hospitals NHS Trust, Peterborough and Stamford Hospitals NHS Foundation Trust, South London Healthcare NHS Trust and St Helens and Knowsley NHS Trust.

The trusts will need to meet four "key tests" before receiving funding over 25 years. The conditions include improved efficiency and providing good care through the trust hospitals.

Health Secretary Andrew Lansley said some parts of the NHS had been left with a "dismal legacy" of private finance initiative (PFI) schemes from Labour, which left them struggling with huge debts, in part by private finance initiative (PFI)repayments.

"We need to balance the accountability of the NHS at local level to live within its means on one hand, while recognising that there is a legacy of debt for some trusts with PFI schemes," said Lansley.

PFI was originally introduced by the Tories under John Major, but the use of the scheme was largely expanded into the NHS by Labour.

There are 100-plus PFI schemes, where private firms pay to build hospitals, leaving the NHS to pay an annual fee or "mortgage".

Coalition ministers have attacked Labour over its deals, but the National Audit Office recently reported that for most trusts with financial difficulties PFI was just part of the problem.

A National Audit Office report in October found that the trusts are struggling due to the government's efficiency drive, which means the NHS must find up to 20 billion pounds of savings by 2013-14.

The government has already scrapped a deadline for trusts to achieve foundation trust status by April 2014.

However, it expects the majority of NHS trusts to become foundation trusts by April 2014, either on their own or through merger, with all expected to do so "as soon as clinically feasible."

The Department of Health says without the funding, services at the hospitals would be put at risk.

In December, the Commons Public Accounts Committee said four out of five NHS trusts are struggling to become foundation trusts due to financial problems.

Of those trusts in England yet to achieve foundation trust status, 80% face financial issues, 65% have quality and performance problems and 39% are tackling issues over governance and leadership.

The Labour has described the government move as a "smokescreen" to shift attention from problems with the health bill.

"This announcement from the government is a smokescreen on the day that the Royal College of GPs have come out against their Health Bill, joining the royal colleges of Radiologists, Nursing and Midwives in full opposition to their plans," a Labour spokesperson said.