2 Protecting taxpayers and patients
9. Where trusts merge they may not be able to
continue to provide all their current services.
The Department argued that reorganising specialist services in
particular can lead to much better provision and, for these, people
may be prepared to travel further to access better care.
However, most services must always be accessible locally and,
for people who are dependent on public transport, decisions about
where services are provided are critical to whether they are able
to access them. For example, some patients may be put off going
to their hospital appointments if they are too far away and using
public transport is expensive or difficult.
Inequality of access can only help to worsen the inequalities
in health that currently exist.
10. Nearly half of acute trusts in the pipeline
have concerns about their current financial position and nearly
three quarters are concerned that they will not be able to achieve
the level of efficiencies required of them.
Financial issues where trusts may need support from the Department
fall into three categories: repayment of loans received from the
Department; lack of cash to pay creditors or run day-to-day operations;
and charges associated with PFI-financed capital schemes.
The current estimate of the amount of additional working capital
that trusts might need is £376m, although the Department
conceded that the eventual figure could be higher.
11. The Private Finance Initiative (PFI) provided
much needed replacement of antiquated hospital buildings and facilities
but the ongoing long-term cost to trusts, however, has been as
high as 20% of income in some cases.
The Department's examination of twenty-two trusts with PFI debts
has identified around six where, in addition to other financial
difficulties, obligations under their PFI contract are a major
obstacle to them becoming financially viable.
The Department and witnesses from NHS trusts told us that one
reason for the problem was that, at the time PFI deals were signed,
trusts had anticipated continued growth.
Long term PFI commitments can make reconfigurations more difficult,
and the Department may have to offer support once other opportunities
for efficiencies have been explored.
12. There are wide regional variations in the
proportion of hospitals which have become foundation trusts. By
October 2011 all but one trust in the North East had achieved
foundation trust status, while in London 62% of trusts were not
At least half of non-specialist acute hospitals in the capital
cannot achieve foundation trust status in their current form.
The Chief Executive of the NHS explained that part of the problem
in London was a relatively unproductive secondary care system,
and an underdeveloped community system, which means that far more
people go to hospital for relatively minor healthcare needs than
in other parts of the country.
The Department gave assurances that planned
solutions for London do not involve closing hospitals and would
improve clinical services, but were not wholly confident that
trusts would deliver on their plans.
22 Qq 21 Back
Qq 65, 177 Back
Qq 27; 65; 174-177 Back
C&AG's report, para 2.8 and Figure 8 Back
Q 141 Back
Qq 127-128; 130-131 Back
Qq 135-7 Back
C&AG's report, para 2.14 Back
Qq 105-6, 121, 138-9 Back
Qq 30; 105, 124-126 Back
Qq 53; 106 Back
C&AG's report, para 1.20 Back
C&AG's report para 3.10 Back
Qq 204-211 Back