House of Commons - Achievement of foundation trust status by NHS hospital trusts

Achievement of foundation trust status by NHS hospital trusts - Public Accounts Committee Contents

2 Protecting taxpayers and patients

9. Where trusts merge they may not be able to continue to provide all their current services.[22] 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.[23] 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.[24] 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.[25] 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.[26] 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.[27]

11. The Private Finance Initiative (PFI) provided much needed replacement of antiquated hospital buildings and facilities[28] but the ongoing long-term cost to trusts, however, has been as high as 20% of income in some cases.[29] 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.[30] 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.[31] 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.[32]

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 foundation trusts.[33] At least half of non-specialist acute hospitals in the capital cannot achieve foundation trust status in their current form.[34] 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.[35] 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.[36]