Leaders of NHS organisations are confident they will avoid being pushed into the failure regime, which so far has been unfit for purpose
I have spoken to the commissioners or leaders of several NHS providers with serious financial problems.
The circumstances of these providers vary greatly but they share certain characteristics: they are in deficit and dependent on bailouts, and expect to be so for some time.
‘The concept of insolvency makes little sense when it is down to the DH to decide whether or not to inject funds into troubled a provider’
Their financial problems probably cannot be solved without reconfiguration, or continued subsidy, or both. They are simultaneously grappling with serious quality issues, for which the obvious solutions come at increased costs.
In most of these cases, the providers have recognised the need for major changes and are working on plans accordingly. But the problems they are dealing with are so complex, and the solutions so far from obvious, you must inevitably question their chances of success.
In every case I have asked: what are the chances that Monitor or the NHS Trust Development Authority will push the organisation into the failure regime?
Pretty much everyone I spoke to acknowledged it was a possibility but was optimistic it wouldn’t happen in the near future.
Most tellingly, one commissioner said: “Monitor is going to have a lot more of these coming up in the next couple of years, and if there is a credible plan that… it thinks is doable I guess from its perspective it would rather let it run.”
There are several things we have learned about the failure regime since it was first used in south London last year.
First, it is not an insolvency regime. The concept of insolvency makes little sense when it is down to the Department of Health to decide whether or not to inject funds into a troubled provider, and when the process for making those decisions remains opaque.
‘The proposed changes might make “special administrators” less susceptible to judicial review but they will not make their decisions less contentious’
Second, it is therefore a means for the centre to drive reconfiguration in areas where it has no faith the local NHS can do so, and is just as politicised as any other reconfiguration.
Third, it is therefore something regulators will only do when they think there is no possible way to avoid it.
That might seem obvious, but it was only last year that the King’s Fund warned there was “a risk that the failure regime will become the first, rather than last, resort if planned reconfigurations of services ahead of financial failure are not made easier and quicker”.
That this scenario now seems unlikely shows just how difficult using the failure regime has been. I would expect it to remain so despite ministers’ attempts to make the regime “fit for purpose”.
The proposed changes might make “special administrators” less susceptible to judicial review but they will not make their decisions less contentious.