20 trusts set to miss foundation trust deadline

More than 20 hospital and mental health trusts have been warned they are entering an “end game” because they will not be ready to become foundation trusts before December 2010.

Those unable to meet the labour government’s deadline face either radical restructuring or becoming part of a “shopping list” for existing foundation trusts looking for takeover opportunities.

The list of trusts has been compiled by HSJ after NHS chief executive David Nicholson ordered strategic health authorities to estimate the date they expected each of the outstanding 111 non-foundations to apply to the regulator Monitor for authorisation.

“I’m sure there will be takers for these organisations. You focus on becoming a foundation or someone else will do it for you”

Even with two years of restructuring and investment to go, SHAs anticipate 20 trusts will not be ready by the deadline. An additional six have been scheduled for December 2010, leaving no room for delay.

Capital problems

The list includes some trusts with long standing problems, such as Royal Cornwall Hospitals, and others that are more surprising, such as Great Ormond Street Hospital and University Hospitals of Leicester. Of the 20 with no date at all, 12 are in London – a further indication of the scale of the capital’s problems.

Foundation Trust Network director Sue Slipman told HSJ: “This will concentrate minds. I’m sure there will be some takers for some of these organisations. Either you focus on becoming a foundation trust or someone else will do it for you. The Department of Health is saying this is the end game and we need to get things moving now.”

HSJ understands that Mr Nicholson’s instruction to SHAs to draw up “foundation trajectories” followed behind-the-scenes pressure from foundation trusts. They wanted the DH to be explicit about trusts in trouble so they could start negotiating takeovers and, where appropriate, government subsidies for this.

Recently, chief executives at two of the 20 – Barts and the London and West Middlesex University Hospital – resigned amid performance problems. This has sparked concerns that SHAs could try to clear out chief executives to make way for takeovers or enforced mergers.

Outright failure

Foundation trust leaders contend that being on the list is tantamount to outright failure. There are three times more on the list than the six trusts deemed “financially challenged” by the DH.

North Bristol trust chief executive Sonia Mills said her trust had no anticipated application date as it had reached an “impasse” over its historical deficit. It will not clear it until 2012 and is in the middle of difficult planning for a large private finance initiative hospital, she said.

Monitor rules out applications from trusts with deficits.

“The clash of rules is out of our hands,” Ms Mills said. “At the moment we are not discussing it with the board because we want to get our private finance initiative through first.”

The trust is not exploring any merger or takeover options.

A spokesperson for Great Ormond Street Hospital for Children trust said its main sticking point was the pending legal challenge to the private patient income cap, which could see its private income radically curtailed.

The list includes district general hospitals seen as too small to survive the migration of patients to either community or specialist tertiary services. NHS North West director of healthcare systems Alison Tonge said Trafford Healthcare trust fell into that camp.

She said the SHA was exploring whether it could be merged with its primary care trust provider arm to form an organisation focused on community services.

Only one SHA – NHS North East – expects all its trusts to be ready before the deadline.

A DH spokesperson said: “SHAs are continuing to work with trusts to achieve foundation trust status and are identifying those who need more support.”


Health Direct is not surprised by the impending failure of labour’s NHS red tape.
On NHS managers voice worries over ‘Stalinist’ SHA tactics we posted:

The zero tolerance culture for failure has made some chief executives fear for their jobs as a “Stalinist” culture is draining the NHS of experienced chief executives and making trusts insular and risk averse, Health Direct has learnt.

“If someone asked me for views as to whether they should apply for a chief executive’s post, I’d say I wouldn’t touch it with a barge pole”.

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