More hospital trusts set to go into red, says expert23 July 2010
The number of hospital trusts running deficits - which has in the past led to cutbacks in surgical operations and calls to close departments - is likely to rise, warned the new chairman of the body which will end up regulating them.
Steve Bundred, the chairman of Monitor which health secretary Andrew Lansley says will oversee all hospitals by 2014, said he was expecting that the "number of trusts in difficulty will increase in the current year and more so in the future".
Bundred told a conference hosted by the Reform thinktank that the health secretary had already made it clear the £20bn of NHS savings envisaged by the last government was not "going to be enough".
"At the same time," he pointed out, "we know that in a number of areas our health care is not as good as that of other [wealthy] countries."
At present, Monitor regulates only NHS foundation trusts, which make up half the hospitals in the country. Lansley says within four years, all hospitals will achieve foundation status - becoming free-standing, self-governing organisations that no longer require the Department of Health's approval to spend and borrow as such transactions would no longer appear on the Treasury books.
Bundred has emerged as a central figure in Lansley's white paper, with wide ranging powers to replace managements in failing hospitals and force them to turn over services that cannot be made to pay to rivals in the voluntary and private sector.
Bundred made a veiled criticism of the department, saying it had a "centralising" view of the NHS and failed to understand the "autonomy proposed for hospitals".
As an emergency response to a looming shake-up in the face of cost-cutting, the department has attempted to exert control over the £1.7bn set aside by trusts for emergencies, and the £2.9bn in cash surpluses that foundation trusts have built up. "Centralising approaches are deeply ingrained in the department to any problem that emerges," said Bundred.
Nicolaus Henke, head of healthcare at consultants McKinsey, said the issue of deficits was a pressing one in the NHS, as Lansley plans to close down the 152 NHS primary care trusts that fund hospitals and have until now rolled over debts in the system.
The health secretary will instead transfer the trust budgets to GPs, but Henke questioned whether he would he transfer deficits. "Ifthey suddenly find themselves, say, inheriting £50m of debt, what will GPs do? This could be the case in Oxford, or Surrey, or many parts of the country."