For the first time in the history of the NHS, a hospital trust has been formally warned that it could be declared bankrupt and put into administration.
South London Healthcare was formed in 2009 by the merging of the Princess Royal University Hospital, Queen Mary’s Hospital and the Queen Elizabeth Hospital.
After inheriting a large debt, mainly from a private finance initiative (PFI) from two hospitals, the trust started 2012 £69m in the red.
As well as the debt, South London Healthcare has some of the longest waiting times for operations and longer than average waits in A&E. However, it does have low infection and death rates.
Now, Health Secretary Andrew Lansley has told the trust an administrator could be brought in within weeks. This is the first time a Health Secretary has made this move.
In a letter to the trust, Mr Lansley said: "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."
If the trust was broken up, another NHS organisation or private provider could take on some of the services. However, experts say that providing emergency funding was not an option because it would send out a message that ministers were ready to bail out hospitals that got into difficulties.
This is a wakeup call to around 20 other NHS trusts with long-standing financial problems.
A spokesman has assured patients with and without health insurance that services could run ‘as normal’ until a decision is made.
© ActiveQuote Ltd. 2012