Crisis over South London NHS: An Insider’s Call to Campaign


Mark Booth analyses the latest recommendations on the future of the South London Healthcare Trust.


The catalogue of financial problems besetting the NHS – privatisations, debts, Private Finance Initiatives (PFI) and Department of Health cuts  – has finally broken through in the forced bankruptcy of South London Healthcare NHS Trust.

Financial crisis? 

The causes of this funding crisis consist in a mix of cuts, government financing policy, and managerial incompetence. The NHS’s South London Healthcare Trust (SLHT) is the product of a merger between Princess Royal, Queen Mary and Queen Elizabeth Hospital Trusts in 2009. These three Trusts already had existing debts from PFI building projects, which SLHT then took on. The burden of PFI interest payments grew until they were absorbing 16% of the Trust budget, £67 million of a turnover of £459 million. In order to maintain the standard of care while such a large portion of the budget was being spent on loan repayments, the Trust ran up a large deficit with the Department of Health (DoH).

The Trust accumulated a debt of £153 million by March 2012. This was forecast to grow to £207 million by March 2013. Health Minister Andrew Lansley responded by forcing the Trust into administration in June 2012, and appointing a Special Administrator to the Trust (TSA) to develop recommendations to bring the Trust’s running costs back within budget. These recommendations were announced on 29 October 2012. Unsurprisingly, amid the documents issued by the TSA, none of the recommendations dealt with the issues causing the budget crisis.

Instead, the DoH, through the TSA, have used this opportunity to propose a radical reshaping of NHS services in South London, clearly demonstrating the governments long term vision for the NHS. Crucially, these plans not only affect SLHT, but also Trusts and hospitals across South London.

Firstly, the SLHT is to be dissolved, and its services taken over by other healthcare providers. The report recommends that Queen Mary’s Hospital Sidcup should transform into a community health centre under the name ‘Bexley Health Campus’, that the facility should be owned by Oxleas NHS Foundation Trust with services “provided by a range of organisations.” The range of services suggested includes “day case elective surgery, endoscopy and radiotherapy.” There are services provided by other South London NHS Trusts on the site already. The report states these should remain, but is unclear as to whether the process of developing the site into a “Health Campus” will open it up to private providers. We can assume this to be a likely outcome, as the report discusses the possibility that the Princess Royal Hospital, part of the South London Healthcare Trust, will be privatised and taken over by an “independent” provider.

Secondly and most seriously, A&E services are to be closed at University Hospital Lewisham. Although not part of the SLHT, the TSA states that the proposals must cover SLHT in the context of services within South London, and so will apply recommendations beyond the Trust. While healthcare services should be understood as interlinked, the numerous restructurings and reforms imposed by Labour and Tory governments have fragmented these services as unnecessarily competitive and disorganised.

In the report, the TSA singles out Lewisham as a cuts target, because of £600,000 of over-expenditure. According to new DoH funding rules, a Trust must generate a 1% surplus. Therefore, the TSA argues that £2.4 million need to be added to the existing deficit, and concludes that Lewisham Trust has a deficit of £3 million. Even though 80% of this deficit is fictional, resulting of a demand that the hospital must produce a surplus when none was previously required, it is still far below that of many NHS Trusts. Moreover, this deficit is dwarfed by the £4 billion the NHS has in its reserves. Consequently, Lewisham’s deficit is not a rational and legitimate justification for the disproportionate destruction of the services proposed by the TSA’s report.

Market irrationality 

Instead, a return to the structures of the fully nationalised and integrated NHS of the 70s would constitute a better response to this crisis. It would allow many of the funding issues to be resolved without the damage caused by closures and privatisations. In the ‘pre-privatisation’ era, Strategic Health Authorities directly funded and managed hospitals across large swathes of Britain, using risk pooling, economies of scale, planning and the ability to redistribute resources from low-cost to high cost areas, so as to meet the differing healthcare needs of the population. Lewisham’s minor deficit could easily be met by transferring funding from other areas of the NHS where a surplus exists.

This minor resource redistribution would be a much preferable solution than the planned redistribution of patients across South London NHS services, should these closures go ahead. Given that Lewisham A&E sees over 100,000 patients a year, the redistribution of these patients across the other A&E departments in South London will massively increase the workload and strain on these services. Needless to say, the increased travel time and overcrowded services pose greater threats to the health of critically ill patients.

Maternity services are also to be closed at Lewisham Hospital, as well as many acute wards. At the same time, the development of a centre for “non-complex inpatient procedures (such as hip and knee replacements)” will be developed at Lewisham, in order to “serve the whole population of south east London”.

Finally, and most galling, is the fact that the DoH has agreed to give the Trust £25 million a year to guarantee the PFI repayments which SLHT is still required to meet. While the Trust is forced to slash services and sack its staff to reduce its deficit, the PFI vultures who caused the crisis in the first place are guaranteed their funding. There is not a clearer example of private profits coming before patients’ needs. The state is subsidising private business interests, which would otherwise be forced to accept a loss.


While these changes may seem confusing and contradictory – and the report is quick to point out the many health services which will remain and the wide variety of services still provided by neighbouring trusts – the restructuring aims to transform the services into attractive sites for exploitation driven by the profit requirements of private healthcare businesses.

The “Bexley Health Campus” at the Queen Mary site could become little more than a shopping centre for elective and diagnostic procedures: the “range of organisations” quoted here meaning whichever private provider is able to tender for the profitable contracts in these areas. At present, some services on site are provided by Guy’s and St Thomas Trust, and Oxleas NHS Foundation Trust. While preferable to outright privatisation, the patchwork of different NHS trusts competing to provide different but complementary services points to the need to integrate the different organisations back into a single national body. In any case, we should not open the process up to further fragmentation by involving the private sector.

Diagnostics and day case elective procedures have a high profit-to-cost ratio. In many NHS trusts, the tariffs they receive for these procedures pay for the greater costs of acute services, A&E, intensive care, maternity and complex operations. This is partly what has driven other Trusts to take over or run these services, as the funds they receive then pay for their own acute facilities.

Reducing or removing acute services altogether from a hospital means the private sector can take on these relatively risk free sections of healthcare, while leaving the burden of acute services to fall on other already overburdened NHS providers.

Likewise the cuts at Lewisham seem designed to strip the hospital of the costly and “unprofitable” services it currently provides so it can be transformed into a site for non-complex elective procedures; essentially a “factory” for hip and knee operations unburdened by the costs of providing A&E, acute wards and maternity services. Such a facility could then be easily contracted out to one of the transnational health corporations which are trying to grab as much of the NHS budget as possible, while seeking to minimise the number of complex and costly services they take on.

The end result, if the recommendations are carried through, will be a disaster for health services, patients and health workers. The loss of local services will mean longer travel times, at greater cost and inconvenience for patients, coupled with longer waiting times and poorer care at the remaining services in South London.

It will mean greater fragmentation of services, and the destruction of a functioning community hospital in Lewisham. Patients may face the scenario where they have their consultation at one site, their diagnostic tests a second, and their actual operation at a third, rather than having access to all necessary services in one place.

The creation of a specialised centre for non-complex operations, backed by the millions from private health corporations, could lead to a drain on NHS resources across South London, as the private health corporations compete to acquire as much non-complex elective surgery from South London as possible. Operations diverted from other NHS trusts will mean losing the tariffs from the operations, and thereby much needed funding to support their own acute services.

Any chance of planning healthcare to meet patient’s needs, of rationally organising services to benefit the local population, of sharing the cost of acute patients across the wider NHS will be lost if these plans are carried out. It will set in motion a vicious spiral where NHS Trusts lose funding to the private sector, close or lose contracts for other services, lose further funding which leads to more closures and lost contracts. The NHS will be destroyed at the expense of private sector profits.


A mass community and union campaign is being organised to stop the closures and save hospital services in South London. A demonstration of over 10,000 people was held on Saturday 24 November outside Lewisham Hospital.

The next action is the “Converge on Kershaw” protest on 4 December at 6pm at the Calabash Centre, George Lane. Matthew Kershaw is the TSA and author of the consultation report that proposes the closure of Lewisham A&E, maternity unity and complex and emergency surgery. This is a chance to show Kershaw just what we think of his report and show him the contempt he’s showing residents of Lewisham and users and workers at Lewisham Hospital. All are welcome at the action.

There is also a weekly rally, happening every Wednesday outside the hospital on Lewisham High St from 1-2pm. Please come down and show your support for the campaign and the hospital, and keep the pressure up on the government to abandon these plans. All are welcome, the more activists, banners, flags and protest signs the better.
Hospital workers are organising themselves and are building a staff lead section of the campaign aimed at coordinating the type of direct action, strikes and occupations which will be needed to force the government to withdraw these attacks. Hospital workers are appealing for trade union branches to adopt a ward or department which is threatened with closure, send messages of solidarity to the workers affected, if possible pledge money towards a strike fund and invite a hospital worker to speak at their workplace or branch meeting.

To do so, please contact: [email protected] and sign petition here:

The campaign’s website is at


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