Monitor has placed Mid Staffordshire Foundation Trust under administration, saying it cannot be sustained in its current form.
The combination of the trust’s current financial difficulties and the impact of the Francis report has proved impossible to surmount.
Monitor will appoint special administrators to run Mid Staffs and plan its reorganisation – with options including the dissolution of the trust.
Mid Staffs is the second Foundation Trust to be placed under administration this year: the first, South London, was judged to have failed financially but not clinically, with PFI debts being a major factor.
Mid Staffs is also facing financial problems, having been bailed out with £20m from the DH in 2012, and having to cut its costs by 7% this year. Its small size – only two acute hospitals – counts against it economically.
However, it is also under pressure not to let its clinical standards slip, following the Francis report into over 400 preventable deaths at Stafford Hospital from 2004 to 2008.
The growing panic in the trust was exposed when a Stafford Hospital paramedic abused health campaigner Julie Bailey on Twitter, saying that he hoped she became seriously ill and found the nearest hospital shut down.
Julie Bailey’s ‘Cure the NHS’ campaign is credited with having led to the Mid Staffs enquiry. Her mother was among the people who died due to serious medical neglect at Stafford Hospital.
Monitor sent a ‘contingency planning team’ into Mid Staffs five months ago. Its report into “sustainable options for alternative clinical models in the area” will shortly be published, the regulator said.
The special administrators will have 150 days to develop a plan for service reconfiguration, working with local commissioners.
Professor John Caldwell, Chairman of Mid Staffordshire FT, said: “We have accepted for some time that MSFT working alone cannot produce a long lasting solution to the issues we face to ensure financial and clinical sustainability.”
Given that the financial constraints of FT status previously led the trust to experience a disastrous breakdown of care, finding a solution there is a key challenge for the NHS reform programme.