The Department of Health’s Matthew Kershaw has been appointed as the trust special administrator at the failed South London Healthcare Trust.

The Director of Provider Delivery will combine chair and chief executive responsibilities after it made history by becoming the first trust to enter administration following debts of £65m last year.

Health Secretary Andrew Lansley said Mr Kershaw “must now drive the changes and shape a sustainable solution” at the trust.

As part of his new duties, Mr Kershaw will be required to produce a draft report containing recommendations for the future of the trust before Parliament by the end of October. This will then be submitted to the Health Secretary before he makes a final decision on the way forward for the trust by February 2013.

The DH said that the newly appointed trust administrator would be supported by “a dedicated expert team including an independent clinical panel as well as NHS and external strategic advice. In particular, he will bring together a clinical advisory panel”.

The Department of Health has questioned finances and mortality rates at Hull and East Yorkshire Hospital Trust as it gears towards foundation trust status.

A letter from Matthew Kershaw, Director of Provider Delivery, DH, to trust Chief Executive Phil Morley highlighted a number of issues which had “triggered the first stage” of an escalation process.

It followed an earlier discussion between the two when mortality rates at the trust were found to be higher than the national average and how the trust’s income did not match its activity.

The letter – sent after a meeting between the two in February – reported that the trust had been “red rated” for three consecutive months. Issues such as board capacity and performance measures had been addressed since then, however concerns over liquidity issues were also noted.

The Trust will now work with its SHA to establish Tripartite Formal Agreement and an Accountability Agreement to “bring back” to the DH “for our consideration”, the letter said.