The takeover or merger of troubled trusts in order for them to achieve foundation status “is not a convincing solution” that will ensure their future sustainability, according to MPs.

In its latest report published today, the Commons public accounts committee questioned whether such reconfigurations would solve the clinical and financial difficulties of the worst performing trusts and predicted “some form of further intervention” would be needed.

However, the report, Achievement of foundation trust status by NHS hospital trusts, noted the government had so far failed to develop a failure regime to deal with those that proved unable to resolve their problems.

The report is based on evidence sessions with NHS chief executive Sir David Nicholson and Department of Health managing director of provider development Ian Dalton. MPs also heard from Winchester and Eastleigh Healthcare Trust chief executive Dr Chris Gordon, Ealing Hospital Trust chief executive Julie Lowe, and Clare Panniker, chief executive of North Middlesex University Hospital Trust.

The committee said it was “already clear” that it would be “extremely difficult” for the remaining 113 non FT trusts to become foundation trusts by the government’s intended target date of April 2014.

“The challenges facing those hospitals which have still to attain foundation status are more severe than previously thought,” the report said.

It highlighted that 80 per cent faced financial difficulties, 78 per cent had “strategic issues”, 65 per cent had performance and quality challenges and nearly 40 per cent needed to strengthen their governance and leadership.

The report said: “Creating a national network of hospital trusts which are autonomous and financially viable presents hugely difficult challenges. It remains unclear whether all the problems trusts have highlighted can be resolved.”

The report warned that, while mergers and reconfigurations were “inevitable” for trusts viewed as currently unviable, it was not clear how FT status as part of another organisation would solve their long standing problems.

“Some of [them] are very large and are facing severe financial problems, including debt as well as poor performance,” the report said. “It is not a convincing solution that combining trusts which are already challenged or unviable will somehow create a more sustainable successor, without some form of further intervention.”

The report added that such reconfigurations would “inevitably reduce the range of services provided by some hospitals” meaning the DH would have to support otherwise unviable services in some areas “so that all local people have access to the healthcare they have a right to expect”.

The committee was particularly scathing about London, arguing that the situation in many parts of the capital was “unacceptable and long standing problems need to be tackled urgently”.

The report acknowledged that the DH and strategic health authority NHS London were aware of the difficulties facing the capital, but claimed they “cannot just leave this problem to individual trusts” and called on them to “develop a clear strategy and appropriate support for the creation of a sustainable, safe and efficiently delivered health system”.

Launching the report, committee chair Margaret Hodge said: “London is in a particularly shocking state and nobody has got a grip on long-standing problems. We remain to be convinced that combining struggling hospitals into larger trusts – as with South London – will somehow produce viable organisations offering good quality, accessible healthcare.”

King’s Fund chief executive Chris Ham said the committee’s report “once again highlights the severe financial and clinical problems facing some hospitals”.

“Recent announcements by the secretary of state backing service changes in some high profile cases have signalled a welcome willingness to embrace the need for change. This should be followed by an honest dialogue with the public and a wider programme to reorganise the hospital sector, including service closures where this is necessary to improve the quality of care,” he said.