New powers over local hospitals will allow NHS special administrators to take area-wide view, says expert

Out-Law News | 13 Mar 2014 | 2:13 pm | 2 min. read

MPs have backed new legislation that would allow the special administrator of a struggling NHS trust in England to make changes to services in neighbouring hospitals with no financial problems as part of a rescue plan.

The measure was introduced in response to a High Court ruling last year preventing the proposed closure of maternity and accident and emergency services at Lewisham Hospital, which had been recommended by the special administrator of nearby South London Healthcare NHS Trust. It is contained in the Care Bill, which has now been approved by the House of Commons.

Healthcare law expert Barry Francis of Pinsent Masons, the law firm behind Out-Law.com, said that the new power would allow special administrators to look at the delivery of care "across an area" when drawing up rescue plans.

"The trust special administration process is designed to deal with urgent issues affecting the ability of a trust to deliver patient care, whether for clinical or financial reasons, or both," he said. "The decision in the Lewisham case shows that, under the current law, that process is flawed because the delivery of care must be seen across an area and not just within one trust."

"Of course there is concern hat this could be unfair to an efficient trust - but this is about ensuring financially and clinically viable provision where the pool of money and clinical resource is not infinite," he said.

The amendment would apply to NHS Trusts that have been placed into special administration, a procedure that was created in 2009 under the Unsustainable Providers Regime. It would allow a trust special administrator (TSA) to make wider recommendations than those that would only affect the trust, and enable the Health Secretary and regulators to take decisions based on those recommendations.

The House of Commons has also proposed an additional amendment, which must now be considered by the House of Lords, which would require a TSA to consult with the commissioners of any additional affected trusts before making recommendations. The commissioners would then be able to decide to undertake wider consultation where appropriate.

The special administration procedure has so far been used twice: to dissolve South London Healthcare and Mid Staffordshire Foundation trusts. South London Healthcare was disbanded on 1 October 2013 and its three hospitals absorbed into other nearby trusts. Under the original proposals, recommended by special administrator Matthew Kershaw, Lewisham Hospital would have lost some maternity and accident and emergency services. However, the Court of Appeal confirmed in November that the government was acting outside of its powers by ordering the closure.

Addressing the House of Commons, health minister Dr Daniel Poulter said that both the special administration procedure itself and the new power were only designed to be used "in extremis". He said that that was the reason that the process had "been used only twice in the past five years".

"I stress at the outset that the TSA regime will not be used routinely, and will only be used when all other processes at a local level to deal with the challenges of hospitals have been exhausted," he said. "The usual approach for locally led reconfigurations will remain."

"The TSA system is one of last resort. It is about ensuring that local solutions are initially found for trusts in difficulty. That may include support from the NHS Trust Development Authority or Monitor, as part of a special measures process, or it may involve more rigorous inspections ... All other such processes will have had to be exhausted before the TSA process would be necessary."