Intervention at hospital trust
The independent body that regulates NHS foundation trusts is taking regulatory action at Sherwood Forest Hospitals.
Monitor has found the trust, which manages Newark Hospital, to be in significant breach of two terms of its authorisation:
These are in the general duty to exercise its functions effectively, efficiently and economically; and in its governance duty.
Monitor's Chief Operating Officer, Stephen Hay said: "Monitor has stepped in because the trust’s financial performance has deteriorated.
"It failed to deliver recurrent savings of £10m in the last financial year and made a £5.9m loss in quarter one this year.
"We had already increased our regulatory scrutiny because of financial and governance concerns."
During the next few weeks Monitor’s Board will consider the most appropriate form of regulatory action to take.
A spokesman for Sherwood Forest Hospitals Foundation Trust said: "The board acknowledges the announcement from foundation trust regulator, Monitor, that they have found Sherwood Forest Hospitals NHS Foundation Trust in significant breach of the terms of its authorisation.
"This announcement in no way suggests that either Monitor or the CQC have raised any concerns about the quality of patient care.
"The board identified the risks to maintaining on-going compliance as early as 2010, principally driven by our PFI, which was approved in 2005 with the support of the wider local health economy. "The challenging size and scale of the PFI has been further impacted by significant reductions in income and utilisation of our hospitals as a consequence of more care for patients being provided closer to home and the centralisation of specialist services.
"Whilst protecting and improving the quality of patient services the Board has simultaneously taken successful action to mitigate the risks to date.
"During 2011/12, despite a very challenging background and significantly increased emergency demand, the Trust achieved 9.5% EBITDA, amongst the most efficient in the foundation trust sector. "At £6.2m (excluding impairment) our year end deficit was a significant improvement on our approved plans. As a consequence, we remained within the terms of our Authorisation throughout 2011/12, again an improvement on our plan.
Tracy Doucét, chairman of Sherwood Forest Hospitals NHS Foundation Trust, said: “We fully acknowledge the importance of delivering our cost reduction plans.
"At the same time, however, we must ensure we can safely meet additional demand for our services and ensure we deliver efficiencies and plans at a pace which maintains safe and high quality care. This remains our primary responsibility.’
‘’Both the Board and Monitor recognise the additional challenges presented by our PFI and the degree to which this exacerbates the already significant financial pressures facing all NHS organisations. It is clear that right across the NHS, and in particular for many District General Hospitals and those trusts with large PFI commitments, strategic and sustainable solutions will often be beyond the control of individual organisations. This will require the involvement of others in the local health economy. Sherwood Forest is no different in this regard.’’
‘’The board remain committed to continuing to deliver high quality care and services for our community and patients.
"We will continue to take the actions necessary to drive further efficiencies; to address our forward risks and to ensure financial stability. We will continue to work pro-actively with our wider local health economy partners and with Monitor over the coming months to address the challenges and to deliver a sustainable health service for our patients.’’
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