Statement from PAC Chair on NAO report on Achievement of foundation trust status by NHS hospital trusts

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

This NAO report makes for very grim reading, and places a huge question mark over the Government’s ability to deliver its health policies. There are at least 20 trusts that will never achieve Foundation Trust status in their current form, and as many as 48 are unlikely to obtain foundation status unless they substantially improve their financial position.

The Government has already had to relax the deadline for converting all Trusts to foundation status by April 2014. The NAO found that from 2013 over half the ‘pipeline’ trusts will become the responsibility of the new NHS Trust Development Authority because they will not yet have achieved foundation status.

London faces the biggest challenge, with the highest number of trusts experiencing severe financial problems which will prevent them converting into Foundation Trusts. 62% of trusts in London have yet to achieve foundation status. We will question officials closely on how they are going to address the complex and longstanding problems these trusts face.

The NHS is already facing challenging demands to cut spending by £20bn a year by 2014-15. The NAO report acknowledges that the drive to make savings will make it more difficult for trusts to achieve foundation status.

The report found that over 30% of trusts seeking foundation status are likely to need additional financial support, which could require access to around £375 million in loans. Over a quarter of pipeline trusts with major PFI schemes are not financially viable for that reason. We will need to know how the Government will find this funding when it is demanding substantial efficiency savings from the NHS.

The financial obstacles faced by trusts should not distract from issues of poor service and performance. Too many trusts who have not achieved foundation status are failing on cancer waiting times and referrals to treatment and underperforming on patient experience.

 The report is available to read on the National Audit Office website