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NHS trusts may never achieve foundation status due to crippling debts

Published on 15/12/2011

MPs have warned that a third of hospital trusts are in financial difficulty and may never achieve foundation status, and dozens more will have to merge and be broken up in order to pay off crippling debts.

The Public Accounts Committee said that due to historic debt, bad management and the current drive to make savings, NHS services in England will have to undergo major reorganisations.

Wards may have to close as NHS trusts face large debts

The Government is driving to get all NHS trusts to foundation status by 2014. However, many hospitals are saddled with large private finance initiatives (PFI) deals, meaning they are effectively heavily mortgaged.

In fact, at the end of September this year, only 139 NHS trusts had achieved foundation status, leaving 113 looking to get there in just over two years.

Four out of five of these trusts were facing financial difficulties and a struggle to achieve financial status, and 20 hospital trusts have declared that they will never be able to meet the tough financial conditions required by the government.

The Government has promised to help a small number of trusts to repair their situation, but it would only be in exceptional circumstances. Most trusts that can’t pay off their debts will have to be merged or broken up.

These dire circumstances mean that services will have to be cut and patients will be forced to travel further to neighbouring hospitals, particularly in deprived communities.

Committee chairman Margaret Hodge said: "These trusts will be forced into reconfigurations or even mergers.

"This may deal with the financial challenges involved but could leave some deprived communities with unequal access to high quality healthcare when hospital departments are closed and services moved.

"London is in a particularly shocking state and nobody has got a grip on long-standing problems."

With the NHS under severe financial pressure to make savings, there has never been a better time to invest in private medical insurance. Medical insurance complements the service provided by the NHS rather than replacing it, and guarantees prompt treatment in a local private hospital. Compare health insurance quotes online now.

© ActiveQuote Ltd. 2011

Categories:  NHS and Hospitals
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