NHS Gloucestershire has broken with the trend of healthcare reform in England by forming a new NHS trust, following a public consultation.

The new provider trust will run nine community hospitals and employ 3,000 NHS staff, with a budget of £400 million.

As alternatives to the social enterprise and competitive tender options favoured by the Government, this initiative is a potential challenge to NHS reform.

The decision follows a year-long local campaign against private sector involvement in Gloucestershire’s healthcare.

In 2011, NHS Gloucestershire tried to set up a social enterprise (or not for profit company) to provide healthcare services after April 2013. Local campaigners argued that this set-up would be vulnerable to private sector takeovers.

From May 2012 the authority conducted a public consultation in which 96% of 2,500 patients said they wanted the services to remain within the NHS.

NHS Gloucestershire Chief Executive Jan Stubbings said: “It is now time to look to the future and we are confident that everyone – staff, community partners and the public – will pull together to make sure that community support and local services are the best they can be.”

Sandwell & West Birmingham Hospitals NHS Trust is being sued by the family of a patient whose cervical cancer was repeatedly misdiagnosed.

Before her death, Jeannine Harvey (pictured) was diagnosed as suffering from anxiety, nerve pain, a potential torn ligament, protruding disks and sarcoma.

The 33-year-old mother underwent more than 30 medical consultations, but was only diagnosed with cervical cancer through a biopsy a month before her death.

Her family claim that an earlier biopsy would have led to more timely diagnosis and potentially life-saving treatment.

At an early stage of Ms Harvey’s illness, an ultrasound scan revealed a mass 4cm wide in her pelvic area. However, a laparoscopy six weeks later appeared to show that the mass was not there, and she was returned to primary care.

By the time the tumour was treated, it had become infected and caused her pelvic bone to shatter.

The trust is being sued for negligence by Ms Harvey’s family. Her sister, Marie Donovan, said: “I want to find out why they missed so many opportunities to diagnose my sister, whose tortuous death was entirely preventable.”

Renowned NHS foundation trusts in England will be encouraged by the Government to establish new facilities abroad in measures to increase profits.

Proposals by the Department of Health and UK Trade and Investment will see high-profile hospitals such as the Royal Marsden and Great Ormond Street create branches abroad to boost funds.

Profits from the overseas facilities would then be reinvested back into the NHS.

The plans, which are set to come into force later this year, have been criticised by the Patients Association who called them concerning.

“The key and only focus of an NHS hospital should be to provide treatment to patients on the NHS,” said the Association’s Michael Watson. “Any moves which would see commercial ventures, which are naturally going to be important for hospitals because they need to use them to raise revenue, would simply result in the attention of the hospitals being taken away from the core purpose – to treat patients in the UK and instead be focused on these hospitals abroad.”

Under the plans, Healthcare UK will identify trusts wishing to expand into new countries and find clients who wish to use the services. Funding for the ventures would come from the private sector to establish the facilities.

London’s Moorfield Eye Hospital and Great Ormond Street already have facilities in Dubai. But critics have argued that other hospitals are not in a position to provide services overseas, and any profits raised would be minor compared to the £100bn annual running cost of the NHS.

Plans to globalise the NHS were first outlined by Labour back in 2010. However, Jamie Reed, Shadow Health Minister, said the proposals were further measures to commercialise the health service.

He said: “At a time when staff are losing their jobs and waiting times are rising, the Government’s priority should be sorting out the mess it has created in our NHS.

“Under David Cameron we’re seeing a rampant commercialisation of the NHS. He needs to get a grip and start focusing on patients, not profits.”

Circle, the first private healthcare provider to manage an NHS trust, has drawn up proposals which it estimates could make the firm more than £8bn from other failing trusts.

In a presentation given to investors before it took over the management of Hinchingbrooke Hospital, it highlighted a number of other money-making opportunities in the NHS.

The document identified 32 trusts it viewed as “NHS growth opportunities” including Mid Yorkshire Hospitals Trust, NHS Isle of Wight and Barts and the London Trust.

Investors were told how “Circle is well positioned to win new contracts” and how there were “attractive returns on capital invested”.

Delegates at the Jefferies Global Healthcare Conference in New York were also told that St Helens and Knowsley Hospitals Trust was “publicly acknowledged to be a possible contract.”

A spokesperson for Circle said it was well known there were a number of struggling trusts across England and that its business model “would make us a good strategic partner for many of them”.

“Circle’s partnership model and entrepreneurial drive offers an alternative to cuts and closure for struggling NHS hospitals across the country,” said the spokesperson. “We should be allowed to do more.”

Since the presentation, a number of the 32 trusts outlined in the document have gone on to merge or gain foundation trust status.

When Circle took over Hinchingbrooke it agreed to take on the hospital’s £40m debt and, in return, to take the first £2m profit, 25% of the next £4m and 33% of the next £4m. It has since said it has improved performance in the NHS hospital’s A&E and colorectal departments, as well as making £1.1m cost savings.

The recently declared bankruptcy of South London Healthcare NHS Trust has been linked to Barclays Bank’s manipulation of the interbank lending rate (Libor).

Health finance experts have called for a public investigation into the impact of the Libor fraud on hospital PFI debts.

Writing in the British Medical Journal, Allyson M. Pollock and David Price said the conflict between the trust’s falling income and its escalating PFI debts was partly due to the dependence of PFI repayment rates on financial derivatives.

Barclays Capital has been convicted of fraudulently inflating the value of derivatives in order to distort the cost of bank borrowing.

Derivatives play a key role in PFI projects: investment banks such as Barclays Capital use them to secure loans against a hospital’s future revenues.

The PFI scheme for the Princess Royal University Hospital PFI in Bromley, a major factor in the South London Healthcare NHS Trust debt, relied on interest rate ‘swaps’ that created an artificially high interest rate for the deal.

Profits from derivatives are tied to Libor, and so manipulating Libor enabled Barclays Capital to defraud the trust by indirect means, the authors claim.

They argue that “a major public inquiry” is needed “to determine the full extent to which the high interest rates, swap mechanisms and swap margins fuelling the latest round of hospital and service closures are products of Libor manipulation and fraud.”

A debt of £19m owed by NHS North Yorkshire and York will be written off to provide the area’s CCGs with a clean slate.

The PCT’s debts, which it blames partly on past underfunding, could rise to £50m before it is dissolved in April 2013.

The decision to write off the debt is part of a Department of Health policy to ensure that CCGs take over from NHS trusts without any ‘legacy debts’.

Christopher Long, Chief Executive of NHS North Yorkshire and York, told a trust board meeting the £19m debt was a “best-case scenario” and the actual figure could reach £50m.

Speaking in Parliament, York Central MP Hugh Bayley (pictured) said: “NHS North Yorkshire and York inherited a deficit when it was set up, and despite external consultants and two top NHS managers being brought in to deal with the problem, that deficit has continued year by year, so the Government has to address the underlying funding problem.”

Health Secretary Andrew Lansley replied that PCTs historically “did not cope” with financial restrictions. “It is up to the new clinical leadership in Yorkshire to make these things happen more effectively,” he added.

NHS North Yorkshire and York said the trust’s debt is “historical”, though it noted that overspend on contracts continues. It attributed the problems to a “relatively low funding allocation” and the region’s “diverse geography”.

Scarborough and North East Yorkshire Healthcare Trust has officially merged with York Hospitals Foundation Trust after failing to gain foundation trust status.

The Trust has suffered financial difficulties for the past decade and health bosses decided a merger was required with the York trust to maintain high standards.

Patrick Crowley, Chief Executive of York Hospitals Foundation Trusts, says the merger is a “momentous occasion” as no two acute trusts within a 45 mile radius have ever merged together.

It’s reported that the newly-merged trust will be given additional funding towards the basic operational costs of the Scarborough trust – which has around 2,500 staff. The trust also received £8m last year as part of the deal.

“I’m looking forward to welcoming staff from Scarborough trust into our organisation and to hearing their ideas about how we can continue to provide the very best services for our patients,” said Mr Crowley.

He added that “much of the detailed work” will now be conducted to “integrate the two organisations” to generate the best results and services for patients.

A host of NHS trusts received bailouts totalling more than £1 billion in the last six years, a report from the National Audit Office (NAO) has shown.

The Department of Health was forced to issue four struggling foundation trusts and 17 other trusts the money between 2006 and 2012 to pay creditors and staff.

Amyas Morse, Head of the NAO, said that it was clear “parts of the service are under strain.”

Research found that South London Healthcare NHS Trust – which recently became the first to go into administration – needed a total of £356 from the DH to break even over the last six years. It is yet to pay back the money.

Barking, Havering and Redbridge University Hospitals NHS Trust also required £195 by the DH to cover its debts.

Last year, trusts needed £253m from the DH, the report found – a huge increase from the £76m requested between 2010 and 2011.

The NAO now estimates that NHS trusts and foundation trusts will need approximately £300m more in bailouts next year to cover ailing finances – despite a surplus of £2.1bn across the NHS.

Meanwhile, official figures from the Department of Health showed ten NHS hospital trust recorded deficits last year.

Mid Yorkshire Hospitals was £19m in the red, Surrey and Sussex Healthcare ended with a £6m deficit, Mid Essex Hospital Services Trust ended up with £2m debts and Newham University Trust recorded losses of £200,000.

Hospital trusts in the capital struggled to control finances more than any other part of the country with the region finishing £96m in the red overall.

Sir David Nicholson, NHS Chief Executive, said the “demands of an ageing population and increased costs owing to developments in drugs and advancing medical technologies present challenging financial conditions in a constrained economic environment.”

He added that “all parts of the NHS” will need to take “bold, long-term measures” to meet financial challenges.

A host of NHS trusts received bailouts totalling more than £1 billion in the last six years, a report from the National Audit Office (NAO) has shown.

The Department of Health was forced to issue four struggling foundation trusts and 17 other trusts the money between 2006 and 2012 to pay creditors and staff.

Amyas Morse, Head of the NAO, said that it was clear “parts of the service are under strain.”

Research found that South London Healthcare NHS Trust – which recently became the first to go into administration – needed a total of £356 from the DH to break even over the last six years. It is yet to pay back the money.

Barking, Havering and Redbridge University Hospitals NHS Trust also required £195 by the DH to cover its debts.

Last year, trusts needed £253m from the DH, the report found – a huge increase from the £76m requested between 2010 and 2011.

The NAO now estimates that NHS trusts and foundation trusts will need approximately £300m more in bailouts next year to cover ailing finances – despite a surplus of £2.1bn across the NHS.

Meanwhile, official figures from the Department of Health showed ten NHS hospital trust recorded deficits last year.

Mid Yorkshire Hospitals was £19m in the red, Surrey and Sussex Healthcare ended with a £6m deficit, Mid Essex Hospital Services Trust ended up with £2m debts and Newham University Trust recorded losses of £200,000.

Hospital trusts in the capital struggled to control finances more than any other part of the country with the region finishing £96m in the red overall.

Sir David Nicholson, NHS Chief Executive, said the “demands of an ageing population and increased costs owing to developments in drugs and advancing medical technologies present challenging financial conditions in a constrained economic environment.”

He added that “all parts of the NHS” will need to take “bold, long-term measures” to meet financial challenges.

South London Healthcare may become the first NHS hospital trust to be declared bankrupt after accumulating debts of £69m.

Health Secretary Andrew Lansley has warned the trust that an administrator may be brought in to sort out its finances. The trust could also be dissolved and certain services closed as a result.

Mr Lansley said in a letter that he realises not all of the debts are the trust’s fault. However, he added that problems must be “tackled” and that “we are almost at this point”.

The trust merged three London hospitals in 2009: Princess Royal University Hospital in Orpington, Queen Mary’s Hospital in Sidcup, and the Queen Elizabeth Hospital in Woolwich.

When the three joined to form one organisation, the trust inherited a large debt through a private finance initiative (PFI) that had been used for the buildings at Orpington and Woolwich.

If the Health Secretary decides to disband the trust, it would not necessarily mean that all services would close as another NHS organisation or a private provider could take over responsibilities.

Government ministers are thought to be considering a deal which would see taxpayers taking over responsibility for the £2.5bn PFI contract.

But the option of emergency funding to reduce the deficit is not being considered in a move which ministers believe would allow other trusts to assume similar bailouts.

Mike Farrar, Chief Executive at the NHS Confederation, welcomed the move by the Health Secretary. “The NHS can’t go on with short-term fixes to financial problems,” he said. “That might mean some tough decisions, but hopefully will deliver financial sustainability in the long term.”

Chris Streather, Chief Executive of South London Healthcare, said talks were now ongoing with the Department of Health and NHS London to decide the “best future” for the trust.

“The most important thing is that the health needs of the local population are sorted out,” he said. “Over the last three and a half years since we have merged we have made an enormous amount of progress on quality of care.

“There is a huge gap in our financial plan in order for us to become viable in the long term and this intervention if it solves that problem which it is designed to do is absolutely welcome and will be helpful.”

A decision is expected on the future of South London Healthcare in the middle of July.