UK National Health Service (NHS) failure regime: up to 92 Trusts may be culled

Leadership in Health Services

ISSN: 1751-1879

Article publication date: 6 February 2009

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Citation

(2009), "UK National Health Service (NHS) failure regime: up to 92 Trusts may be culled", Leadership in Health Services, Vol. 22 No. 1. https://doi.org/10.1108/lhs.2009.21122aab.004

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Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited


UK National Health Service (NHS) failure regime: up to 92 Trusts may be culled

Article Type: News and views From: Leadership in Health Services, Volume 22, Issue 1

Keywords: Performance management, Resource management, Leadership challenge

The Department of Health expects to cull up to six hospital trusts a year under its new failure regime, figures in its impact assessment reveal.

The document shows the DH expects to save £200 million a year under the plans, which are out for consultation. It focuses on six trusts affected by long-term deficits and designated as “financially challenged” to model potential savings resulting from slashing the length of time they are in deficit by three years.

This would be achieved through reconfiguring services more rapidly and sacking failing trusts’ boards, leaving them to be merged or run by more successful trusts.

The impact assessment does not assume the cull will stop at the six most troubled today. It estimates that 2.1 per cent of NHS and foundation trusts will fail every year: the equivalent of 5.6 organisations in the first year and 92 across the model’s 20-year duration.

King’s Fund chief economist John Appleby said: “They are anticipating a massive redistribution of NHS resources; they will get to a point where they create huge consolidation and monopoly.”

The DH has attempted to downplay the significance of the 2.1 per cent figure, saying it is for “modeling” purposes only. However, the document describes it as a “conservative estimate” based on the average rate at which trusts have fallen into sustained financial difficulty.

The failure regime will be triggered for trusts and foundations deemed as “challenged” which have not made significant improvement after a year. At that point foundations will be de-authorised and their debts transferred to the state.

A “special trust administrator” will draft a report on the organisation’s future and a 30-day consultation will follow, overriding the duty to consult under the NHS Act 2006. The secretary of state will make a final decision within 35 days.

NHS Confederation policy director Nigel Edwards said the assumption that so many trusts would enter the system each year implied a lack of faith in other performance mechanisms, such as the DH’s own performance framework published earlier this year and Monitor’s regulatory work.

There was a risk the regime could be used to “subvert the democratic process” by imposing reconfiguration, he said. “You might find the [council] overview and scrutiny committees will want to send this to judicial review. There is a legal requirement to consult on substantial and significant changes and this shouldn’t be used as a substitute for that.”

But Kate Grimes, chief executive of Queen Mary’s Sidcup trust, one of four London hospitals in deficit and deemed “financially challenged”, said the regime would be a “good thing because it will enable more speedy action when things are difficult”.

Together with two other local trusts, Queen Mary’s has been in deficit for several years, but reconfiguration plans have been on hold because of local opposition.

Ms Grimes said she was confident the failure regime would have resulted in “the same answer” for the local trusts, only more quickly and with the possible additional efficiency of forcing a governance and management merger.

The assessment shows the DH is becoming concerned to ensure efficiency in the health service and assumes that growth in NHS expenditure will soon slow from 2.2 per cent above the rest of the economy to just 1-1.5 per cent.

A DH spokesperson said: “The existence of a robust, transparent, unsustainable provider regime will act as a spur to improve NHS performance. Consequently, we anticipate the rate at which this regime will be used will be less than 2.1 per cent.”

For more information: www.hsj.co.uk

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