South London Healthcare NHS Trust

Lord Lansley Excerpts

Thursday 12th July 2012 Written Statements

[The Secretary of State for Health (Mr Andrew Lansley)]

I wish to inform the House that I have made an order to appoint a trust special administrator to South London Healthcare NHS Trust. The order will be laid in the House shortly with a report setting out the basis of my decision, in accordance with chapter 5A of the National Health Service Act 2006, as introduced by the Health Act 2009.

My decision is based on the recommendation of the NHS chief executive and the responses to my recent statutory consultation with the trust board, the strategic health authority and local NHS commissioners on the proposal to place the trust in the trust special administrator’s regime. In accordance with the legislation, I have decided it is in the interests of the health service and, in particular, of the patients the trust serves to put South London Healthcare NHS Trust in the trust special administrator’s regime.

I have appointed Matthew Kershaw as the trust special administrator. Mr Kershaw’s role will take effect on Monday 16 July and I will issue him with terms of appointment. From this point, Mr Kershaw will assume full control of South London Healthcare NHS Trust, replacing the functions of the trust board and assuming the role of the accountable officer. He will be responsible for maintaining services for patients as well as developing recommendations to secure a sustainable future for services provided by the trust for me to consider. At this point, and pending the outcome of the regime, the chair and directors are suspended from their board duties in accordance with the legislation. However, some of the executive and non-executive directors will support the trust special administrator in the work he leads during the regime. How this is organised is a decision for the trust special administrator.

My key objective for all NHS providers 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’s regime is to ensure that services provided by any NHS trust subject to the regime meet that objective.

The regime, included by the last Government in the Health Act 2009, offers a time-limited and transparent framework to provide a rapid resolution to problems within a significantly challenged NHS trust and its health economy. This is to ensure long-term sustainability and the protection of access to quality services for local patients. In addition to maintaining the provision of services during the period of the regime, the duty of a trust special administrator appointed to an NHS trust is to develop and consult locally on a draft report, making recommendations to me in a final report about what should happen to the organisation and the services it provides. The objective is that high-quality, sustainable services are delivered to the local health economy. I must make a final decision based on the recommendations made in the trust special administrator’s final report, publishing that decision and the reasons for it in Parliament.

The trust special administrator’s regime is not a day-to-day performance management tool for the NHS or a back-door approach to reconfiguration. The purpose is to deliver a rapid and robust process when the widest range of other solutions to improve and maintain sustainability have been tried, implemented and not delivered the results required. It is for this reason that Parliament agreed to set challenging milestones for any appointed trust special administrator and for the Secretary of State to make a final decision about an organisation within a usual maximum period of 120 working days from the date the order is made.

I am using my powers to extend by order the overall time frame by 30 working days. For South London Healthcare NHS Trust, it means I will make a final decision on the fixture of the organisation within 145 working days from 16 July 2012 and, therefore, by 4 February 2013 at the latest. The issues affecting South London Healthcare NHS Trust are particularly complex; they are long standing and are built on a history of trust mergers, changes in commissioning arrangements and affect a range of providers within the trust’s area. This is also the first time the regime has been used. Therefore, the trust special administrator in this case is starting, effectively, with a blank canvas and will be unable to draw on learning and processes developed by previous trust special administrators.

Furthermore, the future of services at Orpington are about to be consulted upon, following a public health driven and commissioner-led needs assessment. Extending the time period in which a draft report would be produced by the trust special administrator by 30 working days would allow him to take into account responses to that consultation, so far as they are relevant, as he develops his own recommendations in the draft report, assuming that consultation goes ahead. It is crucial that the first use of the regime is robust and has the greatest possible chance of success. I believe that the particular complexities and issues that affect South London Healthcare NHS Trust, coupled with this being the first ever use of the regime, and the opportunity to take into account responses to the planned consultation on Orpington, mean that this is an exceptional case which warrants an extension to the time frame in the interests of the health economy and, most importantly, the patients of south-east London.

Despite recent improvements in quality of services and access times, there is a long-standing history of underperformance, particularly around financial management and some key access targets, within the area now served by South London Healthcare NHS Trust. There has been a consistent inability by the trust to deliver high-quality services whilst balancing income with expenditure over the last seven years. A number of solutions have been implemented to attempt to resolve the worsening problems and ensure the NHS in this area can provide consistent quality services to patients and the public within the designated budget. These systemic, long-standing challenges mean that South London Healthcare NHS Trust has historically underperformed against key quality, performance and finance requirements outlined in the national NHS performance management framework. The trust has also failed to make progress towards a viable foundation trust application. In 2011-12, it incurred the largest financial deficit of any of the 248 NHS provider organisations in England, at over £65 million. The deficit equates to an average weekly overspend of £1.3 million of taxpayers’ money on top of an average allocated weekly income of £8.4 million.

For South London Healthcare NHS Trust, the regime will be used because of the particular nature and scale of the financial and performance challenges, the complex interrelationship, the failure to make the scale of change required in the trust and with its partners and the absence of any viable, alternative strategy to ensure long-term clinical and financial sustainability.

The trust special administrator, working with clinicians, staff, commissioners, patients and the public, and other stakeholders, must now prepare recommendations for a sustainable solution for South London Healthcare NHS Trust as part of the south-east London health economy. The scale of the challenge means that Mr Kershaw will be expected to engage with, and consider the implications of any recommendations he makes with regard to the South London Healthcare NHS Trust on, other providers. Whilst it is not possible to speculate on the effect any decision may have pending the outcome of the regime, providers in the south London health economy could be affected and will be engaged throughout the process.

The trust special administrator will also constitute a clinical advisory panel, comprising prominent clinical leaders, to support and advise him in developing his recommendations. This will provide further reassurance that the TSA’s proposals are based on strong clinical evidence and are in the interests of local patients.

In accordance with my statutory duty, I have published guidance for trust special administrators appointed to NHS trusts, to which they must have regard in undertaking their legal duties. This can be found at: www.dh.gov.uk/health/2012/07/statutory-guidance-tsa/

A copy has been placed in the Library.