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South London’s ‘failure’ leaves the big questions unanswered

The use of the 2006 failure regime to tackle the problems at South London Healthcare Trust is intended by government as a signal to some NHS organisations with financial problems that they are living on borrowed time.

It does not, however, necessarily indicate the political willingness to back the kind of radical action within healthcare economies that many believe is necessary.

The government knew it had to act on South London or risk losing credibility. All commissioners and providers were watching to see whether the bailout culture of the past would continue.

But the most pertinent question is what will result from the decision. The service view is that SLHT’s problems stem from a structural mismatch between supply and the services required by the population.Its proponents claim it is a historic issue - the aggregated product of countless unaligned investment decisions and short-term fixes, made worse by two private finance initiative deals.

They conclude the trust’s problems cannot be unpicked from those of the healthcare economy as a whole and that significant service reconfiguration must result. In short, that over-provision must be tackled and services, for example, not simply broken up and parcelled out to other providers.

But do not assume that all in government share this analysis. There is a strong view that the majority of SLHT’s problems stem from poor management - rather than service closure - and that what is needed is a new broom to drive efficiencies, particularly those affecting the workforce and estate, and deliver relatively undisruptive service redesign.

Blame for the private finance initiative deals can be laid at the door of the last government, so a bailout is easy to propose for that part of the problem.

What might a “management” solution look like? There is already briefing that parts of SLHT will be brought under the wing of foundation trusts, probably Oxleas and/or King’s Health Partners.

However, there is significant government appetite to secure some private sector input into determining the solution for all failing trusts, not just South London.

A “simulation study” carried out by NHS London posited an idea of failing trusts having clinical services run by an NHS organisation, while everything else was managed by a private sector partner. It is more likely this kind of solution will emerge, rather than a more straightforward management franchise to the private sector.

What the government will seek to avoid is any hospital closures, even if some of the “hospitals” left are simply buildings with an NHS badge, housing a collection of community and primary care services.

But what does the decision mean for other struggling trusts without rescue plans already in place? The next to come under the spotlight is likely to be Barking, Havering and Redbridge University Hospitals Trust, which has a financial problem almost as big as SLHT’s and a poorer clinical record.

The managements of Surrey and Sussex Healthcare Trust, Mid Yorkshire Hospitals Trust and Mid Essex Hospital Services Trust must also be looking over their shoulders. Then there is the question of what “failure” mechanism might be used. Monitor is developing its own “continuity of service regime”, but it is not clear when and if this will supplant the 2006 model.

This part of the question about how such major problems will be tackled in the future - when the government has taken a step back and clinical commissioning groups and health and wellbeing boards are calling the shots along with the NHS Commissioning Board, Monitor and the Care Quality Commission.

All those involved admit agreeing a shared plan among so many parties will be a challenge, which is why, as Sally Gainsbury suggests, the proposed academic health science networks could prove to be a useful Plan B for major service redesign.

Readers' comments (14)

  • What this avoids is the issue of resource allocation methodology and a reluctance to move local arreas towards their target. Parts of central London still more than the annual deficit of this trust due to getting more than they "should" on a reccurring basis...When will Andrew Landsley get a grip of this?

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  • Contract out before re-configuration and you will give a licence to print money to the private sector. The model suggested above proposes that back office and support services will be run by say Serco and NHS run clinical services. This parallels what some police authorities are trying to do. Can you imagine the contract management issues and the opportunities for V.O.'s. When will they learn?

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  • A lot of these names were in Turnaround in the first decade. So it suggests the measures that the DH paid individuals so handsomely for failed to deliver long-term changes. Lansley has adopted a holding formation for the moment, but the real resolution to the problem remains unanswered.

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  • When will the Department of Health face up to their failure to deal with these issues in the NHS?

    Who will prevent them happening again in other parts of the capital.

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  • Anon 12.37 - you are kidding aren't you? There are at least 22 other trusts this will happen to, and it won't be confined to London. This is just the beginning not the one and only. Read all the other pieces by the Confed and the DH - new powers in the Bill means this will be the first of many.

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  • I am sad that there are so many people who are cheering about SLHT - they are all assuming there is somehwre else for those patients to go and that hospitals are bad. Hospitals are used as the place of first and last resort. Primary care, community care and social services wil ahve to step up to the mark to catch the patients - i work in south london and i can tell you that this will be a big ask

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  • Anonymous 5:43 - I don't see anyone cheering here. All comments seem to be made with a sense of underlying sadness.

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  • Anon 5.43, I work there too but to be honest I think a lot of this is relief not happiness. We've had to pretend everything's OK for too long but now we're forced to make some of those big asks without quite so much shoving things we don't want to hear under the carpet. 770,000 people do need a hospital, of course they do, but some things will have to change at long last. The sooner the better.

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  • I went to an interview for a v snr role at SLHT, at it's invitation, and was pannelled by three men wearing almost identical red braces and cartoon-character ties. Thought I had mistakenly gone to the financial quarter until they rejected my enquiries about costings,planning, and sustainability and then I knew I was after all in the NHS. Despite an armful of national awards for turnaround and financial effectiveness all won in the health sector, as well as a long but successful trackrecord in the NHS they said that I had displayed little understanding of the 'real environment'. And that I had commuicated some unwelcome tendancies to challenge their financial planning. Silly me. There has to be a safe way for staff to challenge - many of the replies on this article explain that they had felt unable to voice concerns from within and in sufficient time for corporate realignment to safely take place.

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  • 1. Do we think a 'crack team' will do any better?
    2. Why do we blame the PFI costs when such a small proportion of overall budget?
    3. Do we really understand the baseline costs / revenues from which we're judging performance of the current team?
    4. Are we open to learning from outside healthcare experience?
    More of the same, expecting a different outcome, defines madness....

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  • For what it's worth, if you look at the legal detail behind the Bill, it's supposed to make action on failing organisations easier. The SoS had to act or lose face. PFI is an easy target because you can blame it on the last Govt even though it was originally a Tory policy going back to 1992 (although Labour did change it a lot). Good NHS people are always hamstrung by politics and the response from the VSM at interview demonstrates that a solution has been predetermined and will be politically driven. My heart sank when I read the detail behind this part of the Health Act, the wretched thing can be made to drag on for years. Meanwhile patients and staff continue to suffer. If we had a less hysterical debate about the private sector that might expedite a solution but so much political capital was lost getting the Bill through one wonders how much is left for the task ahead, which is actually the real one.

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  • Anyone who has a long term view of this health economony knows that this has been an issue for over 20 years with many redesign initiatives, mergers and developments that were heralded as the potenital solution. These were merely "band aids" as the real issue here is the need to close or downgrade a hospital there has never been the political will or political courage to do it. Lets hope its different this time

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  • I remember doing a bit of analysis on SLHT's originator Trusts back in 2009. Their LoS and Day case rates were appalling resulting in them having significantly too many beds in relation to their activity.

    I haven't looked at the numbers since but would guess that they aren't much better today.

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  • Spent some time at SHLT too in a senior role.The key fact is as anon 12.23 said one of the three hospitals needs to go and services rationalised amongst the other two.This will mena moving clinicians and centralising soem services ge one PAS and OP system.
    there is a lot of internal efficience that can stillbe achieved though the 2 PFis are a drag

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