£7.5m lost in Icelandic banking collapse
Fears over the safety of surpluses from Treasury claw-backs
But opportunities for vertical integration
Foundation trusts were the first to be hit by the economic crisis last week when the Christie and Central and North West London foundation trusts each lost£1m in NHS funds in the Icelandic banking collapse.
Both had banked their surpluses with Kaupthing Singer and Friedlander, which was taken into administration last week. Central and North West London chief executive Claire Murdoch said: "We made all our decisions in line with Treasury and Monitor guidance." The foundation had made deposits in September and the Christie in July. Both are fighting to get the funds back but say the lost deposits represent a small proportion of surpluses.
The economic crisis has created renewed fears of government claw-backs of foundation trust surpluses, which totalled£2.5bn in June. That month, NHS chief executive David Nicholson told the public accounts committee that foundations are still "subject to Treasury rules, which are very clear about taking account of the impact on the wider public sector finances".
Expected NHS funding cuts could compel primary care trusts to reconsider foundation proposals to invest in primary care. Until now, many PCTs have viewed "vertical integration" as problematic as it could be used to propel more patients into high cost acute care.