A new supertrust could provide health services throughout much of south east London from next April - but would start life with a debt of more than £200m.

A proposed merger between Bromley Hospitals, Queen Mary's Sidcup and the Queen Elizabeth Hospital in Woolwich would create an organisation with a£400m annual budget. All three boards supported the plan at meetings last week.

Queen Mary's chief executive Kate Grimes has announced she is to leave to become chief executive at Kingston Hospital trust. The other two trusts are currently run by an interim and an acting chief executive.

Nearby Lewisham Hospital trust has decided not to join the new supertrust, saying it has closer links with inner London trusts.

But there are question marks over how the new trust would ever repay its debt - and whether there is scope for significant savings.

Growing deficit

A report by a joint committee of outer south east London trusts says there could be£2.6m savings in management costs from a merger in 2009-10 but, on current projections, the three trusts would still make a deficit of£18.7m in 2009-10 and£20.6m in 2010-11.

The current historical deficit of the three trusts is£187m but that is expected to increase by more than£20m in this financial year.

The trusts are launching 12 weeks of "stakeholder engagement" but say formal public consultation is not necessary.

However, Sylvia Scott, who chairs the joint overview and scrutiny committee representing local boroughs, says the trusts should consult on the proposal.

Clinical shake-up

The move comes as a major shake-up of clinical services in the area - outlined in A Picture of Health - has been referred to the health secretary by two overview and scrutiny committees and is now expected to go to the Independent Reconfiguration Panel. This would see Queen Mary's in Sidcup lose some services but would take several years to implement.

The joint committee argues that the three trusts are already suffering recruitment problems, with a high number of acting and interim senior managers, including two out of three finance directors, and a number of consultant resignations. A merger could reduce some of the uncertainty over the future.

A report to the three trust boards says: "The fragility of the three current organisations is leading to increasing concerns about maintaining safe and viable services."

A spokesperson for NHS London said: "Any merger will need to ensure clinical and economic sustainability. The first priority therefore following the proposed merger will be to make sure that these trusts move as rapidly as possible into a sustainable situation."

But the strategic health authority could not say what, if any, action might be taken on the historical deficit.

THE NEW SUPERTRUST

  • Three major sites in Woolwich, Sidcup and Bromley

  • Income of£400m a year

  • Debt of£187m (mainly from Bromley), plus this year's deficit

  • Possible savings of£3.2m a year from running one board and other changes