Mid Staffs special administration 'could cost £15m'

Monitor’s estimate means the process could in total be more expensive than the public inquiry into the scandal at the trust, which cost £13m and lasted two years.

The regulator triggered the trust special administration process for Mid Staffs in April last year after it was deemed to be “unsustainable”.

If Monitor’s estimate is correct, the cost will dwarf the amount spent on the special administration process for South London Healthcare Trust, which has been estimated at £5m.

In an update on the Mid Staffs process, including costs, published last week Monitor said it had spent £7.3m on the work to date. The health secretary Jeremy Hunt last month accepted the special administrators’ recommendations, developed over several months, to dissolve the FT.

Since it is so far through the process, it is unclear why Monitor estimates the remainder of the process could cost between a further £4.7m and £7.7m. The regulator’s work will end when the FT is dissolved, which a spokesman said would happen “as soon as possible”.

He could give no indication of when this would be, but said it would be decided by Monitor after “support from the trust special administrators, NHS Trust Development Authority, providers and commissioners”.

Monitor would also not explain how it had arrived at its figures.

The cost of the work so far, at £7.3m, is more than 20 per cent higher than the £6m estimate originally given.

These costs do not include those of the “contingency planning team” which was appointed by Monitor in October 2012 and recommended it be placed in special administration. This work, carried out by Ernst and Young and McKinsey and Co management consultants, cost £2.5m.

The recommendations approved by Jeremy Hunt last month will see some services closed and those remaining run by University Hospitals of North Staffordshire Trust and the Royal Wolverhampton Hospitals Trust.

Even after the changes proposed by the special administrators, they expect there will be a financial deficit in the health economy at the end of a transitional period, which ends in March 2017.

The special administrators’ final report, published in December, said: “[We] have concluded that, in all probability, there is no solution which focuses soley on the reconfiguration of Mid Staffordshire Foundation Trust services which will reduce the forecast financial deficit to zero.”

One management consultant in the health sector told HSJ: “[£12m-£15m] seems like an awful lot of money to pay to not solve the problem.”