Mid Staffordshire Foundation Trust − the first organisation to be taken through Monitor’s failure regime − will not be able to sustain its current services in the future, investigators have found.

A report to Monitor by Ernst and Young and McKinsey, due to be published today, said Mid Staffordshire did not have a plan that would enable it to be financially balanced. It has reported a deficit for the past three years.

The document said although care was safe at the moment the “costs associated with [its] operating model [were] significantly higher than the national average” and it would “struggle to meet national clinical standards” over the next three to five years, particularly in emergency care.

There had been significant improvements in care at the scandal-hit trust but: “The catchment population for Mid Staffordshire is well below the royal college standards recommended size of 450,000 for an acute general hospital providing the full range of facilities, including specialist staff and expertise for elective and emergency medical and surgical care.”

The investigators also found the trust would need financial bailouts for the foreseeable future and “as such it must be deemed insolvent”.

Mid Staffordshire received a Department of Health bailout of £20m in 2012-13 and the investigation found the trust would need to find £53m in savings and £73m in subsidies over the next five years to break even.

The foundation trust has a turnover of £155m and 344 beds across its two sites. It was authorised by Monitor in February 2008 and has been in significant breach of the terms of that authorisation on financial and governance grounds since March 2009. In 2010-11 the trust increased its annual staffing spend from £100m to £109m.

Monitor confirmed the work would cost £2.5m and the bill had been footed by the Department of Health.

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