Axe looms at debt-hit NHS trust

South London Healthcare NHS Trust was the first to be placed in administration after it reached the brink of bankruptcy.

Now special administrator Matthew Kershaw, who was parachuted in to run the trust last summer, says it should be "broken up" - with other organisations taking over the management and services.

Thousands protested against initial plans tabled by Mr Kershaw last October.

Health professionals and politicians also voiced fierce opposition.

The trust was created in 2009 after the merger of three hospitals - the Princess Royal in Orpington, Queen Mary's in Sidcup and the Queen Elizabeth in Woolwich - and has been losing around £1.3 million a week.

Mr Kershaw also raised fears of privatisation when he said that any debts should be written off by the Department of Health so that "new organisations" were not "saddled with the issues of the past."

This would include bailing out massive PFI debts, which swallow up 16 per cent of trust income.

Campaigners warned that bringing in privateers elsewhere has already proven to be a failure.

Ali Parsa, boss of the first private firm to manage an NHS hospital, Hinchingbrooke hospital, Cambridgeshire, stepped down last month leaving its deficit twice as high as operator Circle had boasted.

Health Emergency campaign group chairman Geoff Martin said the South London Healthcare trust had been "ripped to shreds" through a "lethal combination of mismanagement, the brutal cost of financing PFI schemes and an obsession with a 'target-led' culture at the expense of patient care."

Under Mr Kershaw's plans Queen Elizabeth would link with Lewisham Healthcare NHS Trust, King's College Hospital NHS Foundation Trust would get hold of the Princess Royal and Queen Mary's would be turned into a "hub" for health and social care in Bexley.

The report has gone to Health Secretary Jeremy Hunt, who will make a decision on the trust's future by February 1.

Unison branch chairman Conroy Lawrence said: "These recommendations are cost-driven. If you take millions out of the NHS as this government is doing then A&E departments, maternity units and hospitals will close."

And doctors working at the trust warned that plans to dissolve it could have a "devastating" impact on the nearby financially stable Lewisham Healthcare Trust, which faces losing its A&E and having its maternity ward turned into a midwife-led unit under Mr Kershaw's plans.

They warned that if LHT was downgraded it would lead to the closure of other departments at the hospital.

During an urgent question in the Commons Dame Joan Ruddock said Mr Kershaw's recommendations should not be used to justify closing essential hospital services and used to force through a "major reconfiguration of services via the back door."

She said: "In order to tackle the huge financial deficits the administrator proposes to close Lewisham Hospital's A&E services, including the acclaimed children's A&E, end medical and surgical emergency care and demolish maternity services.

"This cannot be justified - 120,000 use Lewisham A&E each year, over 30,000 children use the children's A&E, over 4,000 babies are born in the hospital each year."