Mid Staffordshire Foundation Trust has become the second NHS trust to be put into the special administration regime, following in the footsteps of South London Healthcare.
Under the Unsustainable Provider Regime, the Health Secretary is able to appoint a special administrator to review any NHS trust, as long as this decision is taken “in the interests of the health service”.
Consequently, healthcare regulator Monitor is consulting on the appointment of a special administrator for the beleaguered trust.
Once the administrator has completed their review and published their final report, it will be up to the Health Secretary to decide whether to rescue or dissolve Mid Staffordshire Foundation Trust, or potentially recommend its acquisition by or merger with another trust.
In the case of South London Healthcare, the National Director for Provider Delivery at the Department of Health, Matthew Kershaw, took over the day-to-day running of patient services.
From the date of his appointment, he had 45 days to publish his recommendations for the trust, which was then followed by a 30-day consultation period, and the publication of his final report.
After this, the Health Secretary decided to dissolve South London Healthcare, with each hospital within the trust being taken over by a neighbouring institution.
With a government report identifying 22 NHS trusts that were struggling, these appointments should serve as a warning to others which are facing difficulties.
Furthermore, how the process continues to play out will provide valuable information to private commercial entities and banks that are working with the NHS, and could encourage them to undertake further dealings.
The team at Palmers is experienced in advising on insolvency issues and all aspects of commercial debt litigation, so if you are working with an organisation that is struggling in the current economic climate, please contact us for dedicated advice.