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Struggling South London Healthcare should be broken up, says Special Administrator

The Department of Health official asked to make recommendations for the potential restructuring of health provision in south London has concluded that the South London Healthcare NHS Trust should be dissolved.10 Jan 2013

The final report from Matthew Kershaw, who was appointed Special Administrator to the Trust last July, recommends that services provided by the three hospitals run by South London Healthcare be taken over by other organisations. The report will now be considered by the Health Secretary, who will publish a final decision early next month.

Infrastructure law expert Barry Francis of Pinsent Masons, the law firm behind Out-Law.com, said that the contents of the final report were not surprising. Kershaw's draft report, published in October, came to the same conclusion.

"There has been some criticism that the process effectively cut out the consultation process which would otherwise be followed in the case of major reconfigurations," Francis said. "Of course, in the context of annual losses of £60 million, a degree of speed would seem appropriate."

"Once more we see the emphasis of blame on the costs of the PFI contract, although this represents just part of the financial problem. In any case the real issue is not whether the new building was a PFI building but whether it was the appropriate building in the first place. That is a quite different question and goes to whether the extent of the reconfiguration is radical enough to meet current healthcare needs and economics," he added.

South London Healthcare was formed in 2009 from the merger of the Princess Royal University Hospital, Orpington, Queen Mary's Hospital in Sidcup and Woolwich's Queen Elizabeth Hospital. It inherited a large debt at the time of the merger, primarily due to construction costs relating to the buildings at Orpington and Woolwich. The Trust has accumulated a £150m deficit over the last three years and is currently overspending by £1.3m each week, according to the Department of Health.

The Health Secretary was given the power to appoint a special administrator to review an NHS Trust if "appropriate in the interests of the health service" in 2009 under the Unsustainable Providers Regime. South London Healthcare is the first NHS Trust to be reviewed under this power.

The report calls for Queen Elizabeth Hospital to be absorbed into the nearby Lewisham Healthcare NHS Trust, and Princess Royal University Hospital to become part of King's College Hospital NHS Foundation Trust. Queen Mary's hospital would be restructured as a community 'health campus' operating under Oxleas NHS Trust, with underused parts of the site sold off.

Mayor of Lewisham Steve Bullock described the proposals as "seriously flawed and dangerous". As proposed, the plans would see Lewisham Hospital lose its maternity and accident and emergency services.

"I feared all along that this process was set up to rush through ill-conceived proposals with no intention of listening to the views of local people, the people who use local health services and the people who work in our local health services," he said. "Today we have the confirmation. Mr Kershaw's ears were closed. These were seriously flawed proposals in draft and they remain seriously flawed and dangerous proposals. The Secretary of State should reject them."

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