NHS foundation trust at risk of Insolvency

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A hospital trust needs to save £53m over the next five years to stave off insolvency, a health watchdog says.

The report by Monitor said that without continuing financial support the Mid-Staffordshire NHS Foundation Trust would not be able to pay its debts.

It said experts were examining whether services should be moved to other hospitals or health providers.

The Department of Health gave the trust which runs Stafford and Cannock hospitals, more than £20m last year.

The report said the trust was also struggling to provide high-quality clinical services.

Prof Hugo Mascie-Taylor, from Monitor, said: “If the Department of Health removed its financial subsidy it is clear that clinical services would suffer.”

‘No financial plan’
Monitor said that for the trust to break even it needed to save £53m over the next five years – about 7% of its yearly budget – and also get a £73m subsidy from the government.

It said without that amount the trust would be unable to pay its debts and would be “deemed insolvent”.

Once it had received the report from the panel about the future of services it would decide what action to take and whether to put the trust into special administration, the watchdog said.

Lyn Hill-Tout, chief executive at Mid-Staffordshire NHS Foundation Trust, said she accepted that it was “not clinically or financially sustainable”.

She said: “Despite all the efforts not only of the trust but of the local health service, we do not have a plan which brings us to financial break even by 2015.

“This is because medicine has and will continue to become more specialised and smaller hospitals cannot attract or resource the specialist teams and infrastructure required to maintain such services.

“One solution is to network, which is to share services with larger, specialist hospitals, something Mid Staffs has already begun to do successfully.”

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