May 19 2013 Latest news:
Tuesday, June 26, 2012
An NHS hospital trust with huge Private Finance Initiative commitments faces collapse under the crippling weight of debts,
South London Healthcare could be declared bust with debts of £69m, placing under threat vital services.
Liquidation of the hospital trust would be the first of its kind.
Currently run by South London Healthcare are the Princess Royal University Hospital in Orpington, Queen Mary’s Hospital in Sidcup and the Queen Elizabeth Hospital in Woolwich.
A special administrator could be drafted in by health secretary Andrew Lansley.
Annual losses of up to £75m are expected to continue for up to five years. Private Finance Initiative has been criticised as a cash-cow for private firms and poor value for taxpayers.
Mr Lansley wrote: “I recognise that South London Healthcare NHS Trust faces deep and long-standing challenges, some of which are not of its own making.
“Nonetheless, there must be a point when these problems, however they have arisen, are tackled. I believe we are almost at this point.
“However, even after this support has been provided, your organisation still expects to be in need of significant financial resources from other parts of the NHS and I cannot permit this to continue. That is why I am considering using these powers.”
The source close to Mr Lansley said Labour brought the south London trust to “the brink of bankruptcy”.
“Labour turned a blind eye to these problems for years. They burdened it with two unaffordable PFIs worth £61 million a year and they crippled the organisation with debt from the beginning,” the source said.
“The standard of care that patients receive at the hospital trust is not good enough, although there have been some improvements in recent months.
“It is crucial that those improvements are not put at risk by the challenge of finding the huge savings that the trust needs to make.”
The trust pointed out that it had one of the lowest mortality rates in England and infection rates three times lower than the national average.
In a statement, it said: “We have entered into discussions with the Department of Health and NHS London on the best future for the Trust and our priority, and that of others involved, is to make sure that our longstanding and well-known financial issues are resolved.
“Our staff have worked hard for patients and in spite of significant financial issues, we are extremely proud that we now have among the lowest mortality and infection rates in the country.