First trust put into special administration

On 12 July 2012, South London Healthcare NHS Trust became the first trust to be put into special administration processes.

The Secretary of State for Health, Andrew Lansley, announced that he had appointed Matthew Kershaw as Trust Special Administrator (TSA) to South London Healthcare NHS Trust, under powers contained within the Health Act 2009. The TSA replaced the functions of the trust's board and assumed the role of accountable officer. Kershaw was responsible for maintaining services, as well as developing recommendations to secure a sustainable future for services provided by the trust.

The trust had historically underperformed against quality, performance and financial requirements, and had failed to make progress towards becoming a viable foundation trust. In 2011/12 the trust had incurred a deficit of £65 million. A trust merger had been discussed and evaluated over the years and then implemented, but financial stability had not been achieved.

Report and recommendations

Kershaw delivered his final recommendations to the new Secretary of State, Jeremy Hunt, on 8 January 2013, recommending that the South London Healthcare NHS Trust be dissolved, with the individual hospital sites acquired by neighbouring trusts. It was recommended the Department of Health should write off the accumulated debt.

The TSA's final report recommended a range of management changes (such as improving the operational efficiency of the hospitals which made up the trust and selling surplus vacant and poorly utilised premises), as well as wider changes to services across the South East London area in relation to community-based care, emergency, maternity and elective services.

Significantly, the report proposed the downgrade of maternity and emergency services at University Hospital Lewisham, which was not part of South London Healthcare NHS Trust.

The TSA recommended that the Department of Health provide additional funds to the local NHS to cover the excess costs of private finance initiative (PFI) buildings at Queen Elizabeth Hospital and Princess Royal University Hospital. Transitional funding would be required to cover the in-year finances while the recommendations were being implemented.

Response

The response to the trust special administrator's (TSA) proposals with regard to the University Hospital Lewisham was not enthusiastic and the Save Lewisham Hospital Campaign was quickly set up. For example, Dr John O'Donoghue, a consultant at Lewisham Hospital, was quoted in the Guardian as saying that the plans would set a 'disturbing precedent' and suggested that if services could be closed due to problems at a neighbouring trust, then 'no hospital in London or the country is safe'.

On 31 January, the Secretary of State for Health, Jeremy Hunt, issued a notice outlining his decision on the sustainability of South London Healthcare NHS Trust, accepting the majority of the proposals put forward by the TSA. He accepted the recommendations relating to the trust and these were duly implemented, but he also asked the NHS Medical Director, Professor Sir Bruce Keogh, to review recommendations for service reconfiguration which extended beyond the trust itself.

To address concerns expressed by clinical staff at University Hospital Lewisham and Lewisham Clinical Commissioning Group, the secretary of state asked Sir Bruce to consider whether there had been sufficient clinical input in the TSA’s decision-making process and to consider the likely effectiveness of the proposals. Following the review, Sir Bruce had recommended that a smaller accident and emergency service, with 24/7 senior, emergency medical cover would be more effective (in contrast to the original proposal to downgrade the accident and emergency department to a non-admitting urgent care centre). The secretary of state then accepted the TSA's recommendations subject to Sir Bruce's amendments.

Judicial review

Despite the compromise, the London Borough of Lewisham and the Save Lewisham Hospital Campaign proceeded to take the secretary of state for health and the TSA appointed to South London Hospitals NHS Trust to judicial review at the High Court of Justice over their decision to configure services at the hospital.

Eventually, Mr Justice Silber overturned the secretary of state's decision to reduce services at University Hospital Lewisham on 31 July 2013, finding that the TSA and the secretary of state did not have the powers to recommend, or to take action to reduce the services offered by University Hospital Lewisham. He also found that the TSA did not give enough weight to the objections from local commissioners.

The secretary of state, Jeremy Hunt, attempted to overturn the High Court's judgement that he had overstepped his powers, however the Court of Appeal dismissed this attempt on 29 October, upholding the view of Mr Justice Silber. The court noted that in some cases a TSA might think it necessary to make recommendations beyond the trust under administration and that there might be a justification for conferring broader powers on both the TSA and the secretary of state. However, the fact that the government had inserted a new clause into the care bill to clarify the situation was seen as an indication that parliament had not intended to give the TSA broad powers under the existing legislation.

On receiving the judgement, the Secretary of State for Health, Jeremy Hunt, was quoted as saying: 'I completely understand why the residents of Lewisham did not want any change in their A&E services, but my job as Health Secretary is to protect patients across south London - and doctors said these proposals would save lives. We are now looking at the law to make sure that at a time of great challenge the NHS is able to change and innovate when local doctors believe it is in the interests of patients.'

Later developments

The Department of Health would later change the legislation through the Care Act 2014 to give the secretary of state broader powers.