From Districts to Trusts - London’s hospitals from 1982-2011

The period from 1982 onwards saw continuous and major remoulding of London's hospital service. The economy expanded in the early eighties but in 1989 there was a recession after  Britain’s forced departure from the Exchange Rate Mechanism.   By the mid nineties the economy was once more healthy until in 2007 a world-wide financial recession brought to an end to a period of rapid growth, affecting the economy as a whole and constraining NHS expenditure. London saw substantial changes with the development of Docklands (and the Docklands Light Railway).  Here was a new major financial and residential centre.  Billingsgate Market moved and regeneration was stimulated by building in Stratford for the 2012 Olympics. Always a multi-ethnic city, increasing numbers of immigrants from black Africa changed the demography and the Pakistani population was also growing. There was an influx of people from Eastern Europe as the European Community expanded.

In the first years of the new millennium, Labour provided substantial increases in money for the NHS, expanding staffing and capacity. There was a new accent on quality. Rapid clinical advance made it important to develop clinical networks and to centralise conditions that could be treated better in large centres with round the clock facilities.  This was epitomised by the reports from Lord Darzi in 2008.

 London's hospital system was reshaped in the  eighties/nineties by reports on clinical organisation, academic mergers and resource allocation, but emerged smaller and stronger, with a more substantial research base and better infrastructure. District health authorities, which in 1982 had managed from a distance, disappeared. An increased accent on local management lead to a multitude of trusts providing different types of care under contract, sometimes in competition.

Politically, the earlier years were dominated by the Conservatives, then by Labour for over a decade, and finally a coalition of Conservatives and Liberal Democrats. 

Demography

 London's population changed substantially in numbers, distribution and characteristics.  From a peak of 8.6 million residents in 1939 it had fallen for half a century to a low point of 6.73 million in 1988, its size 80 years earlier(1).  After 1981 inner London grew more rapidly than outer London and after 1991 the population expanded, faster than the UK as a whole, the estimate for 2004 being 7,249 million.   By 2026 the population was expected to reach over 8 million. There was a strong net inflow of young adults, rejuvenating London’s age structure, and the main force behind London’s growth.

The Drivers of change.

During the period under review, dominant themes and changes in political implementation had massive effects on the hospitals and health care services in London.  These are summarised below.

NHS organisational changes

Clinical Services

Changes in clinical practice had an increasing impact on the way hospital care was organised. The development of imaging and MRI, new pharmaceuticals increasingly based on genetic developments, rapid improvement in cardiac surgery, in minimal access surgery and in day care changed the pattern of hospitals. Particularly significant was increasing trend to organise services between hospitals - which might not merge but might be more willing to concentrate activities on one of a number of sites.  The sheer number of hospitals in the London area made this easier than in other parts of the country.  Major trauma, stroke and heart surgical services, as well as cancer care, were increasingly re-configured.  In general practice family doctors also considered the way in which they might cooperate across practices, establishing clinical networks or, using a term of the RCGP, federations

The need to rationalise the capital’s hospitals was driven by a perception that there were too many beds, and a multitude of specialist units that were too small for efficiency.  Increasingly it was recognised that many units implied a small throughput of cases and this might be associated with poor results.  There was also a dearth of services in the long term sector, for example the care of the mentally ill and the elderly

Other factors were now important.  First, the long standing trend to improve the medical education of junior doctors, to which was added changes in working hours driven by European legislation, had a massive effect on how hospitals were organised internally.  Secondly, to the imperative of keeping within budgets was added a new pressure for quality of care.

Primary health care

For most of their history London's hospitals had largely ignored general practice. Poor practice was to be found elsewhere, but London seemed unique in its failure to resolve the problems. London’s size encouraged isolation among the GPs, lack of awareness of good practice elsewhere and a feeling of impotence. The mobile young, a multitude of ethnic and immigrant groups, an intelligentsia, users of drugs and alcohol - they all congregated in London. With a few exceptions, academic general practice developed late in London. London had fewer innovative GPs and incentives to better care that were offered nationally were not readily taken up. Modern premises were less often to be found, and without good accommodation team working was harder to develop. The combination of high land values, unsavoury locations and planning problems made it almost impossible to find a good site in the right place. Recruiting young doctors of high quality was a perennial problem. The inner city doctors faced high population morbidity, nearby teaching hospitals were slow to provide access to laboratory and X-ray facilities and few provided vocational training and postgraduate centres. Inner city GPs were, on average, older, often single-handed and many had trained overseas.  Young doctors seldom wished to enter such practices. ‘Better’ doctors went to greener pastures where, because they were further from specialised services, practices provided a wider range of care and it was easier to develop a good practice.

 For 30 years it had been recognised that if the domination of London’s health services by acute hospital-based medicine was to be reduced, primary health care had to play its part.  It became received wisdom, without much supporting evidence, that substantial parts of care delivered in hospital could be moved into the community.  In a report (Primary Health Care in Inner London, 1981 (11)) commissioned by the London Health Planning Consortium, Donald Acheson, later Chief Medical Officer, had provided an analysis of the problems. After the Acheson Report it was no longer possible to discuss health services in London without taking note of the condition of primary care and making at least a symbolic gesture towards the solutions of its problems.  Following Acheson attempts to improve matters included a London Initiative Zone established after the Tomlinson Report (see below) in 1993 to improve GPs' premises, recruit a new cadre of GPs, introduce innovative approaches to old problems and develop cost-effective care outside hospital. A review five years later showed that many projects had improved premises but in some areas the standards of many surgeries remained unacceptably low. London still had fewer young GPs, more single-handed practices and larger lists. There were more practice nurses, but although primary care in the capital was improving, it was doing so no more rapidly than elsewhere. The initiative was terminated.  The Turnberg Report (1997) again recommended support for GPs and the need to improve recruitment and retention.  It could be argued that the pattern of general practice that worked excellently elsewhere in the country was unsuitable for inner cities and an alternative contract for GPs was introduced. "Personal Medical Services" made salaried service practicable and seemed particularly appropriate to the inner cities.  After 2000 new national initiatives aimed at the improvement of access to the NHS, for example walk-in centres which were not particularly successful, and NHS Direct, were introduced.  Urgent care centres were established along side hospital A and E units to filter off those not requiring the more intensive facilities. The importance of primary health care was stressed again by Darzi [19] (2007), who wished to see the development of 150 large polyclinics from which all GPs and the associated staff would work. In many areas there were already plans to provide better and larger premises , and these initiatives were promptly renamed polyclinics. The cessation by GPs to be responsible for out of hours services (2005,) did nothing to shift care from hospitals to the community.

Psychiatric Services

Nationally, the pattern of mental health services changed progressively. Until the 1974 NHS reorganisation mental illness hospitals generally had their own management committees.  Then they came under multi-service district health authorities but when Trusts were established, separate mental health trusts were usually created with a strong accent on community based services. As the large mental illness hospitals were closed, the policy first was to establish units based on district general hospitals.  This policy was challenged as pressure for a community based service grew.  Progressively the psychiatric service came to be based on community outreach teams, led by psychiatric trained nurses and supported by consultants.  Small units, 10-30 in size, were developed to provide the limited accommodation necessary and the teams came to specialise in specific types of problem.  Often the stress was on acute mental health care and those teams trying to maintain patients stable in the community were sometimes under-resourced.

Health Service Boundaries in London

Boundaries have always been significant in London hospital planning. If hospitals were to be part of a system, they had to be looked at in groups.  Before the NHS, the King’s Fund had looked at the voluntary hospitals and the London County Council had planned its municipal hospitals on a London-wide basis. When the NHS began there were discussions about whether London's hospitals should be considered on a concentric or a radial pattern.  The doughnut (with all the jam in the middle) placed high expertise in teaching and specialisation in the centre, leaving the periphery alone.  The starfish (which had radial communications and relationships) tried to spread central expertise outwards. In the late 1970s the London Health Planning Consortium had planned on a London wide basis, although the implementation had been left to the four Thames Regional Health Authorities and most took little action. Rationalisation increased in tempo after the 1982 restructuring of the NHS, spurred by financial pressures. Because the four RHAs planned in different ways, after the demise of the London Health Planning Consortium the chairmen of the twelve teaching districts jointly examined what was happening and found it impossible to predict the future.

The spatial framework of planning in London often changed.

Organisational changes and their London effects

 There was turmoil in the organization of the NHS because of changes in managerial or political philosophy, the views of the government and the search for cost-effectiveness and efficiency.  The health service restructuring of 1982 was the high point of planning and organisation of services on a district basis. Later, the the introduction of Trusts, hospitals came to have more local independence and the trend to a single district structure began to break down. The introduction of a purchaser/provider split, a measure of competition including a greater role for the private sector, and differing methods of health service finance also affected hospitals

1982-9 Conservative governments and restructuring

The General Management Function (5)

The way in which the NHS was managed was affected by a major review in 1983 by Sir Roy Griffiths, the direct outcome of the chaos of the industrial action of 1982 and the perceived weakness of the 1974 restructuring.  Probably the NHS did not, at the time, devote enough of its resources to proper and disciplined management, but it would have been surprising if Griffiths had not immediately identified the absence of general management as the main difference between the NHS and the business world. In a memorable sentence he said, ‘if Florence Nightingale was carrying her lamp through the corridors of the NHS today, she would almost certainly be searching for the people in charge’

Griffiths' recommendations included a small, strong general management board in Whitehall, that all day-to-day decisions should be taken in the main hospitals and other units and clinicians should be involved more closely in management decisions, should have a fully developed management budget and the necessary administrative support. A general manager should be identified (regardless of discipline) at each level and authorities should have greater freedom to organise the management structure suited to their needs. Griffiths believed that the lack of a clearly defined general management function was responsible for many problems and that the development of management budgets was vital.  Consensus had to go. The government rapidly accepted the general thrust of the report.

1989  Working for Patients  (6)

The next major organizational change took place under Mrs. Thatcher and Kenneth Clarke who aimed to "reform" of the NHS. Many of its concepts were later adopted by Labour. The basic structure in England had not altered greatly either during reorganisation of 1974 or restructuring in 1982. Society, however, had changed and was more consumer-oriented. People  could hardly fail to notice the absence of ‘customer-led’ services in the NHS. The Conservative government explicitly repudiated consensus and partnership with the professions in policy making. The broadly bipartisan approach to the NHS had ended. Among the political beliefs were the paramount importance of a sound economy without which public services could not be funded; the view that there was little the public sector could do that the private sector could not do better; and that managerial inefficiency was rife throughout the public sector, whether in the utilities, the schools or the health service. The changing approach in the NHS was only part of a wider ideological battle about society, industry and public services.  The main ideas often attributed to Enthoven’s Reflections on the management of the NHS (7) were current in radical-right circles

Working for Patients was a challenge to the status quo yet the Review accepted many basic principles of the NHS. The NHS would continue to be funded centrally from taxation, the simplest and cheapest way of raising money. It would remain largely free at the point of usage. There was no suggestion of major organisational change at the top of the management hierarchy. The idea was rejected that a major injection of funds was all that was needed. Instead, reforming incentives and the introduction of a ‘market’ would improve productivity. The purchasing function would be separated from the provision of services. Health authorities would concentrate on the assessment of needs and contract for services; hospitals and community units would provide the services. Good performance would be rewarded for money would follow the patients. The high costs of central London, compared with the lower ones of hospitals on the periphery, was a problem for central hospitals.  Regional and district authorities received funds according to the size of their resident populations, weighted for age and morbidity and for the differences in the cost of providing services. RAWP had almost established equity so it was easier to move from historic allocations to a weighted capitation system.

Hospitals and community services could apply for self-governing status as NHS trusts. Between 1991 and 1995 NHS hospitals were progressively transformed into publicly owned substantially self-governing bodies. Managerially élite hospitals had substantial freedom. Seen by government as a potential flag-ship of the reforms, Guy’s believed that trust status would ensure that a major building scheme would go ahead, guaranteeing its survival.  The idea of trusts had been developed with acute hospitals in mind, but before long applications were received from mental illness and community services.  They too saw advantages in the freedom of action. 

The Trusts had greater financial freedoms. They generated their revenue from contracts with districts, commissioning agencies and GP fund holders.  They needed good financial information but much of the information required to compare relative costs did not exist; the necessary systems were not in place. Many hospitals had no price list. Block contracts, notional costs and wild price variations were commonplace. It took much work and a long time to sort things out.   Over the first few years there was little change in the pattern of patient flows, perhaps 5-10%.There were substantial and unexpected effects on London's hospitals and anxiety that district purchasers would make radical changes, building up local services and avoiding high cost hospitals in the centre.  In the case of city hospitals, particularly those in London, peripheral purchasers would do their utmost to restrict central flow in favour of their local hospitals, many of which were new, with young staff and spare capacity. Teaching hospital trusts were at a disadvantage because of their high overheads and managerial complexity. Their countervailing advantage was that a high proportion of their medical and surgical consultants had sub-specialty expertise. This made them the natural place for junior medical training. Acute trusts sometimes developed outreach services; community trusts looked at hospital-type day care. The borders could blur.

Doctors were now employed by the trust, and not the RHA, so they began to think in a more local way. At Guy's, a hospital that had experienced major financial problems but wished to expand its services, clinical directorates were  established under medical control on the ‘Johns Hopkins’ model. Decisions could be taken more rapidly, new patterns of staffing could be introduced and services could be improved without bureaucratic delays. Because their unit budgets were determined by contracts with purchasers, it was easier to persuade consultants to change their patterns of work.

The need for hospital trusts to generate income led to visible changes. Lilac coloured carpeting and easy chairs, smiling receptionists, a florist’s stall bursting with blooms, a bistro coffee bar and newsagents would appear. Trusts spent money on glossy pamphlets on their services, and on logos. Acute hospital trusts established private patient units to compete with private hospitals. The boundary between the NHS and private medicine was becoming blurred and the phrase ‘internal market’ seemed increasingly inappropriate.

GP practices could apply for their own NHS budgets to cover their staff costs, prescribing, outpatient care, and a defined range of hospital services, largely elective surgery.  Systems of medical audit were introduced to ensure quality of service.  Finally Authorities were reformed on business lines, with executive and non-executive directors

 There were two major planning exercises in early 1992, one by the King’s Fund and one later that year initiated by government (Tomlinson). The impetus for further rationalization stemmed from the second, that of the King's Fund led by Virginia Beardshaw having less impact.

1991 - The King’s Fund Commission (16)

The King’s Fund appointed a Commission in 1991 to develop a broad vision of services that would make sense in the early years of the next century. It spent £500,000 commissioning 12 research reports on which the conclusions were based. The report (1992) analysed the interlocking set of problems posed by health services, medical education and research in London.[21] It said that Londoners received a poor deal from present-day services. It warned that health care in the inner-city might become inappropriate unless there was the political will to back a strategy of fundamental reform. The report accepted the case for substantial change and reduction in acute services with a complementary build-up of primary health care. It did not consider the paucity of back-up beds in nursing and residential homes, which barely existed in the metropolis. It reported that at least 5,000 beds must be closed if the capital were to be guaranteed a good standard of health into the next century. ‘Costs in London are not just expensive, they are extremely expensive . . . change is inevitable . . . Inner London hospitals are top-heavy with doctors and the rate of patients going through is slower.'   While the report indicated the direction of the changes needed, it did not suggest the choices that had to be made, or which sites might be closed.  A series of papers on individual services was published subsequently.  Substantial attacks were mounted on its findings because of a belief that it was working towards a pre-determined conclusion and that some of its members had little sympathy for London or for specialists. Virginia Bottomley would have liked support for decisions she needed to take, and did not get it.

1991-2  Tomlinson (17)

The Conservatives, though committed to market solutions, faced by clear problems requiring decisions at a governmental level, embarked in London on strategic planning. At the 1991 Conservative Party conference William Waldegrave, then Secretary of State, announced a review to be undertaken by Sir Bernard Tomlinson, Chairman of the Northern RHA.  The Times said that Mr Waldegrave was ‘wringing his hands’ over what should be done in London and needed to be convinced that major decisions were intellectually based. There were many bids for development.  UCH/Middlesex, strongly supported by the scientific community because of the quality of its work, wanted a new building and this might mean the closure of other hospitals. Already expansion had been approved at Guy’s, the Chelsea and Westminster was established and St Mary’s was being developed.  By commissioning the inquiry, William Waldegrave had delayed the need to take action before a forthcoming election.

Guy's was in a difficult position.  It had been lauded as a "Flagship" NHS Trust, but in 1991 a black hole appeared in its finances damaging its record.  Tomlinson had suggested a merger on one site with St Thomas's, but which site?  A vicious feud broke out, the Chairman and Chief Executive of Guy's were replaced, and their successors argued successfully for managerial integration but a two-site solution.  Guy's increasingly became the major academic location with regional specialty work, and St Thomas's the acute hospital with accident and emergency.  In parallel, the United Medical and Dental schools battled with academic integration.

‘During the past twenty years,’ wrote Lord Flowers in The Times, ‘with a few honourable exceptions every attempt to reform London medicine has been defeated by vigorous rearguard action on behalf of any hospital or medical school adversely affected. The result has been that the standing of teaching and research in London’s famed medical schools has been steadily slipping. The time has come for the government to stand firm.’  Virginia Bottomley took decisions that her predecessors had been canny enough to defer and for which her successors would be forever in her debt; she was prepared to bell the cat, as the BMJ had put it.  She narrowly escaped defeat in Parliament and a rebellion of some senior London Tory MPs. Her reward was the Department of National Heritage. Robert Maxwell, Secretary of the King’s Fund, said that the creation of big medical centres across London, the main tertiary centres of service, research and education for the future, had been talked about for 50 years. Now it looked set to happen and would be Mrs Bottomley’s best legacy.

1997 - The Labour government

The new NHS - Modern, Dependable (9)

Labour took power in 1997 and Frank Dobson, the new Secretary of State, set out Labour's initial vision in The New NHS - Modern, Dependable.. There were three main themes, revision of the NHS organisational structure, better communication within the service and an accent upon quality with new national supervisory bodies.  All built upon trends already current.  The harder edges of the internal market were softened.  Fund-holding went, co-operation replacing more extreme forms of competition. ‘Partnership’ and ‘integration’ would replace the internal market and the jargon of the market was slowly replaced by that of New Labour. The Conservatives' ‘seamless services’ became ‘joined-up thinking’. The interdependence of health and social care, and joint programmes, were stressed. Labour's plans included substantial change in London’s organisational structures.  London had been divided into four metropolitan regional hospital boards at the start of the NHS (plus Boards of Governors for teaching hospitals), into 4 regional health authorities in 1974, and in 1996 as a result of a review of regional functions into two, north and south of the river.

Frank Dobson, who had made scurrilous remarks about Virginia Bottomley's acceptance of the east London proposals, promised a further review of the future of London’s hospitals.  This increased uncertainty just as some clarity had been obtained, and re-invigorated those campaigning to "Save Barts". There were four broad responses to Tomlinson: the optimistic that primary and community care could be brought up to the standards elsewhere; the realistic accepting the recipe but gloomy about the money and the difficulties; the despairing who doubted whether anything would be accomplished; and the reaction at St Bartholomew’s that was to indulge in old-style emotional campaigning against the proposals. St Bartholomew’s had come to believe its own rhetoric and dismissed any proposal not to its liking, however well founded. Its campaign was given a voice by the Evening Standard in probably the most ferocious media war ever waged against health service managers and NHS policy, unparalleled in its unstinting aggression and partiality.  

 In June 1998, following the London Strategic Review  (Turnberg) Frank Dobson, decided that London would form a single NHS region and a single London Regional Office of the NHS Executive was established on 1st January 1999. The arguments against such a pattern, vetoed by Bevan in 1946 and also rejected at the time of the 1974 NHS reorganisation, were now weaker. A London region had been proposed in the Tomlinson Report (1992). Change had therefore been expected and had ripple effects on the surrounding areas.  Labour moved from fund-holding to an alternative, commissioning by Primary Care Groups (PCGs), later Primary Care Trusts.  Hospital trusts were far less affected by Labour's decisions than other management bodies.  They became accountable to regional offices for their statutory duties, and to health authorities and later primary care trusts for the services they delivered. The separation of planning from provision and decentralization of hospital management was maintained.  

Bed capacity and Hospital restructuring

 Until the mid 1990s it was maintained that London's hospitals provided too many acute beds and it was right to reduce the number. As the health service came under ever increasing financial pressure as a result of  the Resource Allocation Working Party Report (1976) and developments in medical science speeded earlier discharge, the number of beds continued to fall . Ultimately the view that there were too many beds became untenable.  In 1997 the Turnberg report concluded that there was now no evidence that London was now over bedded and the subsequent NHS Plan (2000) (10) accepted that a substantial increase in capacity was needed if waiting lists were ever to be reduced. In terms of staffing and medical student numbers, rather than bed numbers, this was achieved.

source - King's Fund Frequently asked Questions and Department of Health

 A new imperative was now emerging - rationalising/reconfiguring the hospital system. The need to provide specialised expertise 24/7, medical staffing issues and the restriction of the hours worked under EC legislation had changed the criteria for defining the size a hospital should be for safe services.  The progressive increase of sub-specialties added to problems. The need for rotas of  consultants in all the subspecialties could be accommodated in a large hospital but not so easily in smaller District General Hospitals (DGHs). In the 1960s there had been a clear concept of the nature of a DGH.  Now far more specialties were involved in care, and there had to be several of each type to provide a 24 hour service. It might only be possible to staff fewer major hospitals, strategically placed, that could offer a full range of secondary and tertiary services. These might be supported by more local facilities. National Service Frameworks developed for clinical specialties outlined clinical networks of hospitals varying in the sophistication of their services.  Reports of the BMA, Royal College of Physicians (RCP) and Royal College of Surgeons of England echoed the earlier thinking of the Bonham-Carter Report (1969), suggesting that a single general hospital now should serve populations of not less 500,000.(14) (The provision of Acute Hospital Services, London, RCS 1998)  Such hospitals should provide a tertiary service for a population of around a half a million.

Under pressure to improve the volume and quality of services without higher costs, some trusts, for example the Central Middlesex introduced process re-engineering. If the stages in the delivery of care were examined, was there a better way of designing the system? Given better drugs and anaesthetics allowing more speedy recovery, state-of-the-art diagnostics and imaging, minimum intervention techniques and better information systems, could any stages be omitted, or be arranged more economically to save the time and money of both patients and staff? The development of treatment centres, many in the private sector, became a priority in government thinking.  In London few were developed, other than that at the Central Middlesex which itself operated under capacity. The Darzi report (2007) [19} and its successors accelerated the process.

A related problem was the provision of effective emergency care when most consultants were super-specialists. The RCP examining different models of care said half of the hospitals it surveyed had adopted an emergency admission ward, perhaps of 20 beds, with a system of assigning patients to specialist units. Alternatively, all consultants might combine interest in a particular field with more general clinical work, although this would dilute specialist skills. Or there might be a hybrid approach in which there was a combination of specialists and generalists. The RCP suggested that Acute Medicine was itself a separate specialty, required by each hospital taking acute admissions. 

 1997 - Turnberg   The NHS and University Medical Schools.

Labour accepted the need to co-ordinate the planning of health services with changes in medical education. Frank Dobson commissioned a strategic review of inner London. Led by Professor Sir Lesley Turnberg, it reported [17a]within months.  Re-examination of hospital bed numbers showed that they had fallen substantially; between 1990/1 and 1995/6 1130 acute inpatient beds had disappeared from inner London, and when geriatric, maternity and psychiatric beds were included the loss across London as a whole had been 9,271.  Turnberg concluded that there was now no evidence that there were more acute beds available to Londoners than the England average, taking into account the use of London beds by non-Londoners.  Improvements in primary care had not been able to substitute for reductions in secondary care.  Turnberg felt that a five sector scheme would assist planning and that health authorities should work together at sectoral (later SHA) level. 

Capital Development in five London sectors over the period

Some new hospitals planned in the 1970s had opened in the 1980s, e.g. the Newham Hospital (opened in 1983) and the Homerton in Hackney in 1986 on the site of the previous Eastern Hospital, incorporating Queen Elizabeth Hospital for Children.  Further development was supported by the Private Finance Initiative, and major changes took place in each of the five sectors which provided a good framework for analysis and planning.  Among the largest schemes were the Chelsea and Westminster, St. Mary's where the last phases of major development proved too expensive to continue, University College Hospital/The Middlesex, and The Royal London/St Bartholomew’s. The advantage of PFI was that money was forthcoming that would not otherwise have been available.  The problems were the inflexibility once the building had been opened and the financial costs that stretched way into the future and sometimes closed off other opportunities.

The Turnberg 5 sector scheme is a convenient way to consider capital developments. Indeed the sectors came at one stage to be the territory of five London SHAs, and later sectors within which a single London SHA managed planning and financial allocations.  North of the Thames, in the North East the major hospitals Queen Mary College and the medical schools of The Royal London and St. Bartholomew's, in North Central with University College London, in the North West the major hospitals with Imperial College, in South East London with King's College, and in the South West St George's Hospital and Medical School.

North East London

One of the greatest planning conflicts of the last two decades of the century involved St Bartholomew's Hospital and The Royal London. These two hospitals, and their staff, had long standing divergences of view and a deep distrust of each other.  As part of the NHS reforms (1990) the Government introduced the idea of self-governing hospital trusts within the NHS, and Bart’s was planning to set up such a Trust when its independent future was called into question by the publication in 1992 of Sir Bernard Tomlinson’s Report. This did not see Bart’s as a viable hospital and recommended its closure. The Government’s response in 1993 laid out three options for Bart’s: closure, retention as a small specialist hospital, or merger with the Royal London Hospital and the London Chest Hospital. This sparked an intense public debate and a campaign to save the hospital on its Smithfield site.  In April 1994 the Royal Hospitals NHS Trust was formed, incorporating the three hospitals. The Barts and The London NHS Trust was created on 1st April 1994 by the merger of St Bartholomew's Hospital, the Royal London Hospital and the London Chest Hospital.  The Turnberg strategic review (1997) (commissioned by Frank Dobson) supported the case for redevelopment of a 900 bed secondary and tertiary care hospital in Whitechapel, while maintaining some tertiary services on the Smithfield site, mainly cardiac and cancer services.  Bart's would remain open in this role, whilst general hospital services would be concentrated at the Royal London in Whitechapel.  A billion pound PFI development began, the financial cost of which overhung the hospital and prevented its application for foundation trust status.

New building was undertaken at Whipps Cross and Newham General (an Ambulatory Care and Diagnostics Unit and an adult mental illness unit). The new Queen’s Hospital in Romford brought together the services previously run at Oldchurch and Harold Wood hospitals; built under the PFI, it opened in 2006, complementing the rebuilt St George's Hospital Ilford where lower risk and midwife led maternity care was provided. The Queen's Hospital provided a full range of non-clinical services and a managed equipment service under a 36-year concession agreement with Bovis.  It was the second of two huge hospitals in north east London, the other being the Royal London.

Both Labour and the Coalition governments wished to encourage foundation trusts and few had developed in this part of London.  Mergers were therefore encouraged in 2010 to facilitate foundation trust status.

North Central London

The Department of Health had stimulated discussion between the medical schools of UCH and the Middlesex Hospital, two organisations with a similar ethos, and encouraged by this Patrick Jenkin, as Secretary of State in the early eighties, encouraged the University of London to merge the matching medical schools of UCH and the Middlesex while on the NHS side the previous boundary beteween North East Thames and North West Thames was moved and two districts united in 1982 as Bloomsbury,   With the Royal Free Hospital, the University College London Hospitals Trust (UCLH) provided the main university sites.  Of the UCL hospitals, the Eastman Dental Hospital, built and largely funded by an American, George Eastman of the Eastman Kodak Company was granted special health authority status but in 1996 joined UCLH. The Elizabeth Garrett Anderson Hospital was built in 1888 and became part of the same Trust in 1994.  The Heart Hospital was founded in 1857 and became part of the NHS in 1948 as the National Heart Hospital  When its services were moved to the Brompton in 1994 the hospital was re-opened as a private hospital, featuring state of the art accommodation and equipment and specializing in cardiac treatment. Falling into debt, the hospital re-joined the NHS in August 2001, when it was bought by UCLH to become the home for the trust's cardiac services. The Hospital for Tropical Diseases has an ancestry dating back to the Dreadnought Hospital and in 1920 became the home for the London School of Tropical Medicine and the Hospital for Tropical Diseases. The hospital eventually moved to a building in the grounds of the St Pancras Hospital and in 1948 became part of the UCLH.  The National Hospital, Queen Square, for Diseases of the Nervous System including Paralysis and Epilepsy, was founded in 1859.  In 1948, with Maida Vale, the two hospitals were designated a postgraduate teaching group to be administered by a board of governors, directly responsible to the Minister of Health under the new NHS.  The Institute of Neurology affiliated to UCLH to provide undergraduate and postgraduate teaching. The Royal London Homoeopathic Hospital, established 150 years ago, joined forces with UCLH in April 2002.  Turnberg supported the proposal for capital development at UCLH and ground was broken in 1999 for a £422 million private finance initiative that opened in 2005 uniting most of the University College London Hospitals on a single site and providing a diagnostic and treatment centre. The old Middlesex Hospital site was sold off profitably for redevelopment as flats gaining the Trust £175 million.  With its new development commissioned, and its financial situation sound, the Trust rebuilt its obstetric hospital (the EGA wing) and cancer unit and looked at the possibility of bringing other hospitals, including postgraduate teaching hospitals, onto its site.  Some clinical rationalisation was planned, for example the transfer of the Royal National Throat Nose and Ear Hospital from The Royal Free to UCLH.

Elsewhere substantial development was also taking place. The first phase of a new Barnet General Hospital opened in 1997.  A major development took place at the Whittington. At Chase Farm Hospital, a new surgical wing and Treatment Centre were under development, and the North Middlesex was also being redeveloped with a new Emergency Care Centre, Diagnostic and Treatment Centre, and an Acute and Critical Care Centre.

A world-class medical science centre for London was developed by a consortium of Britain’s biggest funders of clinical research, the Medical Research Council (MRC), the Wellcome Trust, Cancer Research UK and University College, London (UCL).  A £350 million scheme went forward on a 3½acre site near the British Library and St Pancras station next. The UK Centre for Medical Research and Innovation would be the largest laboratory of its kind in the world, accommodating 1,500 leading researchers in different fields. This was accredited in March 2009.

North West London

Centrally the sector contained the Hammersmith, Queen Charlotte’s/Chelsea Hospital for Women, Charing Cross and, in close proximity St Mary’s, the Chelsea and Westminster and two specialist hospitals, the Royal Marsden and the Royal Brompton.  It came to be dominated by Imperial College. In northwest London in 1984 the medical schools of Charing Cross and Westminster hospitals united, and in the following year the districts in which they were situated were merged into one authority, Riverside District Health Authority, with plans to rebuild and reduce the number of hospitals to two. The new Chelsea and Westminster Hospital, which enabled the closure of five separate hospitals, opened in 1993. Brent and Paddington District Health Authorities had considered merger; ‘we’re huddling together for strength and warmth,’ said the district manager.   In 1988 Parkside Health Authority was created, uniting St Mary’s and the Central Middlesex, leaving St Charles’ as a non-acute community hospital. Hospital planning involved the part-rebuilding of St Mary’s and rebuilding the Central Middlesex, the first phase being a pioneering ambulatory care centre.

The Turnberg report on London's health service in 1997 called for more rational distribution of specialist services in North West London.  The outcome was the Paddington Health Campus project, a variant of the proposals in the Pickering Report of the 1960s to be funded by PFI. It would bring together Royal Brompton & Harefield NHS Trust, St Mary's NHS Trust, Imperial College's National Heart and Lung Institute and North West London’s specialist children's services to re one site in Paddington. The Business Case was approved by the Department of Health in 2001, but the cost steadily escalated until it was clear that it was not viable. It was cancelled in 2005. The Hammersmith/Queen Charlotte's new maternity facility opened in 2003.

 In the early 1990s the Medical Research Council (MRC), under financial pressure, decided to pull out of its Northwick Park Clinical Research Centre and concentrate at the Hammersmith Hospital.  This site had been bought by Charing Cross Hospital in 1944 to allow it to relocate from the centre.  Because of pressure from the University of London this did not occur and the concept emerged between the MRC, the North West Metropolitan RHB and the Ministry of co-locating research with a district general hospital with a "normal" case-mix.  Perhaps the idea of this association was flawed; science grafted into an unreceptive environment at a district general hospital where there were suspicions that patents would be "experimented upon.".  Perhaps the decision was partly the result of forceful personalities and power politics.

 This withdrawal freed modern accommodation and research space. A small specialist hospital concerned with coloproctology, St Marks, needed to move from its poor accommodation in City Road. St Marks had the foresight to realise that it had more to gain than lose from a merger and grasped the alternative, Northwick Park, with enthusiasm. Relocation in 1995 provided the hospital with immediate access to intensive care, theatres and state-of-the art imaging and service departments. St Marks had its own front door, clinical directorate and all the advantages of association with a busy district general hospital. Organisationally there was amalgamation within the North West London Hospitals NHS Trust incorporating Northwick Park & St Mark's and the Hospitals in Harrow, the Central Middlesex covering Wembley, Willesden, Edgware, Harlesdon and Stanmore.

The Royal Brompton & Harefield NHS Trust was established on 1st April 1998 as the largest post-graduate specialist heart and lung centre in the United Kingdom.  It was based on two sites, one in the heart of London and one in Middlesex. The Trust provided comprehensive patient services for all age groups from infancy to old age and is associated with its multi-faculty university partner Imperial College School of Medicine within which is the National Heart and Lung Institute.

Turnberg supported the approach to collaboration in the rationalization of services that was being undertaken by the hospital trusts and Imperial College.  This was taken further in 2007 when, under the aegis of Imperial College, it was proposed the Hammersmith Hospital and St Mary's to create an Academic Health Sciences Centre, merging units such as renal medicine, and making it easier to bring cutting edge research earlier into clinical practice. This was accredited in March 2009.

South West London

In south west London the position of St George’s was secure, and the plans to relocate the Atkinson Morley Hospital to the St George's site, and further developments there, were supported by Turnberg.  The neurosciences and cardiac centre, the Atkinson Morley Wing, opened in October 2003

South East London

In southeast London the medical and dental schools at Guy’s and St Thomas’ had merged as the United Medical and Dental Schools.  There was protracted discussion and much in-fighting about the future of Guy’s and St Thomas’, whether one or the other site should close, where the accident and emergency department should be situated, and where specialised services should be concentrated.  If these two hospitals agreed on anything, it was that King's College Hospital was subordinate. Ultimately the A & E Department went to St. Thomas’, because ambulance access was far better. Turnberg commented that the merger of the two Trusts had allowed the development of proposals for rationalizing services across the two sites and St Thomas' became the main centre for A and E.  There had also been discussion about the distribution of specialised services between St Thomas', Guy's and King's College Hospital. A new wing at King's College Hospital opened in 2003 and a new Children's Unit was planned.

Turnberg examined redevelopment of acute services in Bexley and Greenwich, and supported the redevelopment of Queen Elizabeth Hospital to replace services at Greenwich, built under PFI at a cost of £93M.  This involved the redevelopment of the former Military hospital including the design, construction and financing of new buildings, the refurbishment of existing ones and the maintenance and operation of the entire hospital. It provided 484 acute beds and 87 mental health beds.  Both it and Bromley soon had large deficits because of the irreducible costs of their whole hospital PFI schemes. In 2005 a major review lasting 5 years was established (A Picture of Health), covering Queen Elizabeth, Woolwich and Bromley Hospitals, Queen Mary Sidcup and Lewisham.  It was became clear that cost-improvement schemes would be quite unable to restore financial health without risking the quality and capacity of services.  The final proposal was for a large reduction in medical and acute bed capacity at the Queen Mary’s, Sidcup site with the closure of 284 acute beds and ceasing to take emergency admissions.  The intervention of the SHA and the PCTs ensured the changes went ahead.  A single trust was established to cover three hospitals. The reconfiguration project, and the lessons to be learned from it, were reviewed in 2011 by The King's Fund.

In March 2009 King's Partners was accredited, an Academic Health Sciences Centre bringing together King's College, the South London and Maudsley FT, Guy's and St Thomas' FT and Kings College Hospital FT.

There would be four university centres, each related to a multi-faculty college, St George’s maintaining an independent position.  The postgraduate institutes were finally brought within the fold, as proposed by Sir George Pickering in 1962.(18) Within this structure, once the colleges became directly funded by the Higher Education Funding Council for England (the successor in 1993 to the University Funding Council) the University of London had to accept the realities of local ambitions, including the individual right to grant degrees.  The colleges had gained financial and managerial autonomy, UCL, Queen Mary, Kings and Imperial being separately identified from 1993/4 and St George's two years later.  The University maintained a coordinating group of the medical faculties to discuss strategy for mutual benefit but each college took a different approach to the integration of medical schools within their fiefdom.

Imperial College

whose Faculty of Medicine was established in 1997, was secure in its prestige and size, and took a firm line with the medical schools now an intrinsic part of its empire, and indeed with the hospitals to which it related. In 2003 it was given the power to award its own degrees, outwith the University of London, but did not immediately use them. On the NHS side in 2007 St Mary's Hospital Trust, The Hammersmith Hospitals Trust and Imperial College united to become the Imperial College Health Care Trust and was selected as one of five National Biomedical Research Centres.  Imperial thought that globally there was only room for 5-6 major biomedical research and teaching centres, perhaps two in the USA, one in the far east and two in Europe.  Imperial considered itself the natural premier league centre in the UK. The ethos of the component medical schools was that of Imperial College, scientific based and of the highest standard; they would no longer have an independent identity. Following school mergers there was a thorough reorganization to develop an integrated medical school. There would be one organisation using the same letterheads.  The Faculty was spread over seven campuses, six the sites of major teaching hospitals.  These were

The Hammersmith & Charing Cross (Hammersmith Hospitals Trust),  In 1988 the Royal Postgraduate Medical School merged with the Institute of Obstetrics & Gynaecology and became part of the Imperial College School of Medicine on its formation in 1997

St Mary's (St Mary's Hospitals Trust),

The Royal Brompton.  The Brompton and Harefield NHS Trust was established on 1 April 1998 following the merger of Royal Brompton Hospital and Harefield Hospital. The National Heart and Lung Institute (itself formed by merger in 1988, and situated next to the Royal Brompton Hospital,) became part of Imperial College in 1995, and part of Imperial College School of Medicine in 1997

Chelsea and Westminster (Chelsea and Westminster NHS Trust) and

Northwick Park (North West London Hospitals Trust).

King's College

gave the United Medical and Dental Schools (UMDS) of Guy's and St. Thomas's room for manoeuvre. King's College was associated with powerful hospitals, Guy's and St Thomas' that. merged post Tomlinson in 1992 within the Guy's and Lewisham NHS Trust that also included Lewisham Hospital and later split from Lewisham as Guy's and St Thomas's NHS Trust.  Internally there were power struggles on both the service and the academic sides to determine the future pattern of service. The Guy's, King's and St Thomas' School of Medicine was created on 1 August 1998 by the merger of King's College London (including the former King's College School of Medicine and Dentistry) and the United Medical and Dental Schools.  From 2007 students registered with King's were awarded a King's degree, rather than one from the University of London.

Queen Mary, University of London -

wished for a medical faculty, but was in a financially weak situation, as indeed were the two medical schools involved, St Bartholomew's and The Royal London.  There were substantial objections to amalgamation from both the medical schools, and the merger in 1995 as Bart's and The London School of Medicine and Dentistry, the medical faculty of Queen Mary University of London, was not a happy one.  Barts and the Royal London had everything one could desire in terms of a local population, but the association with QMC, comparatively weak as a research institution, did them no favours.

University College London -

was less forceful.  University College London Hospitals while having only small local catchments, had substantial financial assets and an ideal academic location next to UCL, perhaps the strongest research base in London. It too was selected as a National Biomedical Research Centre. In July 2008 UCL with Great Ormond Street, Moorfields Eye Hospital, The Royal Free and University College London Hospitals came together as UCL Partners, to create "London's leading health research powerhouse" focussing on ten areas of research each of which posed a major health challenge, e.g. children's health, cancer and women's health. The Royal Free continued to act with a measure of independence but in August 1998 a new Royal Free and University College Medical School was formed even though the Royal Free remained under separate NHS management.  Imperial and UCL discussed a merger, but decided it was in the interests of neither side.  However, the discussions divided the London medical schools into two camps, Imperial College and UCL neither of which were supportive of the concept of London University, and the other three.  In 2005 UCL was awarded independent degree awarding powers by the Privy Council.  Students already in courses would have the option of a degree from UCL or the University of London, those medical registering after 2007 would have a UCL degree. Such moves, covering all subjects and not solely medicine, tended to undermine London University.  St George's, far from the centre of London and with no substantial university link, was not in the same game.

2000- Labour's second wave of changed structures and policies.

The replacement of Frank Dobson in 1999 as Secretary of State for Health by Alan Milburn heralded further change.  Milburn wished it to be fast and over a broad front.  Labour's second policy document was issued in July 2000 - the NHS Plan (10) with the four main themes of increasing capacity, setting standards and targets, supervision of the way the NHS delivered services, and 'partnership'. Against the predictions of many, substantial progress was achieved for example in terms of waiting times and waiting lists. It imposed further challenges on the NHS generally as well as in London. Milburn’s policies and involved a greater role for the private sector, for example in the private finance initiative and independent treatment centres, a wider choice for patients, IT systems to underpin choice, for example Choose and Book, radical changes in funding with the introduction of tariffs and Payment by Results, and Foundation Hospital Trusts with greater freedoms.

Trusts and Foundation trusts.

In July 2002 it was proposed that acute hospital trusts that had performed well could apply to be "NHS foundation trusts".  These would have greater freedom in terms of management, links to the local community and greater local financial control.  Several London hospitals appeared in the first wave in 2006.

The NHS Plan's structural reorganisation took place on 1 April 2002, "devolution day".  Health authorities were replaced by a smaller number of Strategic Health Authorities. Nationally there were 28 with five for London.

Academic Health Science Centres

The example of major biomedical research centres in the USA, which had been able to spearhead clinical development, led the UK to establish the National Institute for Health Research (NIHR) and consider which centres that should be supported in the UK to encourage "translational research" on a national basis. A panel of international experts chose centres in open competition as world class in research. In December 2006 Patricia Hewitt, the Secretary of State, announced five comprehensive Biomedical Research Centres that would be supported, three in London (Kings, UCL and Imperial) plus Oxford and Cambridge, and a further six in particular clinical fields. UCL with Great Ormond Street, Moorfields Eye Hospital, The Royal Free and University College London Hospitals came together as UCL Partners, to create "London's leading health research powerhouse". It rapidly increased in size as Barts and the London Trust and Queen Mary University decided to join UCL Partners, which was already associated with Luton and Dunstable Foundation Trust and Barnet and Chase Farm Hospitals, North Middlesex University Hospital and Whittington trusts.  Imperial saw itself as pre-eminent.  Guy's and St Thomas' NHS Foundation Trust and King's College London also associated themselves. Selection as a Centre was a near guarantee that restructuring of the service would take research excellence into consideration.  Hospitals in a relationship with universities not selected began to consider their own future. Subsequently the health secretary, Alan Johnson announced on 9 March 2009 that five academic health science centres would be created in England, after peer review of the seven final applicants by an international panel of experts.  The successful centres were Cambridge University Health Partners, Imperial College, King’s Health Partners, Manchester AHSC, and University College London Partners. Bids from Oxford and Birmingham were unsuccessful.

2005-6 -  NHS London (SHA) and the Darzi Reports

In 2004 Ministers said that 'the unique nature and scale of health service issues facing the capital might point to a single organisation to oversee service development. Following the Government report Commissioning a Patient-led NHS (Department of Health, 2005), the PCTs that were largely coterminous with boroughs were left unchanged, but a single SHA in London was established in July 2006, a centre for strategic thinking covering 32 London Boroughs with a population of approximately 7.2 million.  NHS London was one of ten strategic health authorities in England.  It brought together the North West London, North Central London, North East London, South East London, and South West London authorities to provide the framework for commissioning of local health services.  One of the new SHA's most important acts was to commission another clinician, Professor Sir Ara Darzi, to review London's health care system, ten years post Turnberg.  His first report The case for change (March 2007) argued for changes because of health inequalities, failure to meet patients' expectations, the need to centralise specialized care, the relationship with academic medicine and value for money.

Reports on London's health services

A Framework for Action  was published in July 2007 days after his ennoblement and appointment by Gordon Brown as a junior health minister in the Lords. Darzi was one of the "goats" in Brown's government of all talents. The report was the product of many hands including McKinsey's. It recommended 5 principles, an individual focus on patients' needs, services local where possible and centralised where necessary, focus on health inequalities, prevention rather than cure and truly integrated care. Technical groups had looked at population trends for example the population expansion in "Thames gateway" and the likely health problems in London over the coming years.  Clinical working groups considered appropriate policies for care and the care pathways that seemed best suited to differing groups of patients.  Hospitals could be classified as local hospitals, elective centres with high througput, major acute hospitals handling complex work, specialist hospitals and academic health science centres. Brilliant in conception, but according to the Guardian a recipe for turbulence, it was a blueprint for a radically different NHS with resemblances to the 1920 Dawson report (the ideas of a physician rather than a surgeon).  Darzi envisaged that London primary care would be provided by 150 polyclinics, handling much work previously undertaken in hospitals. Some large practices already provided the facilities envisaged, but the inclusion of imaging, consultant outpatient sessions and minor surgery would require much investment. The number of major acute hospitals would be cut by more than a half, some being restricted largely to cold surgery.  There might be some 12 specialist hospitals and 8-16 major acute hospitals.  Patients in emergencies would be admitted to the hospital best suited to their needs; near or far. Services for the mentally ill and long term conditions needed improvement and the report was fleshed out with reports of working parties, for example on maternity services.

For these, a multiple tier system was envisaged, according to clinical and social need, of home delivery, midwife run maternity units some on a hospital campus, and full scale obstetrician round the clock hospital units. It was as if the health service would be rebuilt starting from scratch and the outline costing provided by McKinsey's attracted significant criticism. Darzi accepted that the plan had a long timescale but was confident, perhaps over confident, that he could take others with him. He wished his concepts to influence national thinking and offended some by instant solutions to problems with which others had wrestled for years. The SHA went to public consultation and some 5,000 individuals and organisations responded and a bare majority accepted most of the proposals, for example polyclinics. A joint committee of PCTs oversaw the consultation and in June 2008 accepted the broad thrust of the proposals.

Reconfiguration in London

London was entering a further phase of analysis, planning and reconfiguration.  The Primary Care Trusts  took on a major role in reconfiguration following Darzi and in 2009 created six subgroups, three north and three south of the Thames which led to more formal merger of the PCTs. There remained a substantial number of hospital trusts were not going to be able to meet the financial criteria necessary under Monitor's regime to obtain foundation status, and proposals for hospital and trust mergers were mooted, including substantial changes in most parts of London. While some services needed to be reconfigured on a national basis, for example paediatric cardiac surgery, many changes might be desirable within London itself.  For example there was work on south east London to create the South London Healthcare Trust, created in April 2009 this was the product of the merger of three small trusts, Queen Mary's Sidcup, Queen Elizabeth and Bromley Hospital (See above - A Picture of Health), in north east London consultation on a reduction by one in the number of Accident Departments and modification of maternity and paediatric services plus merger proposals involving the Royal London/Barts, Whipps Cross and Newham, consultation in north west London including rearrangement of clinical services in Barnet/Enfield/Haringey and the long running saga of Chase Farm that ended with the closure of its accident department.

 Trauma and stroke reconfiguration

The SHA, NHS London,  hosted Healthcare for London, a temporary organisation paid for by the 31 London PCTs to encourage planning of more complex services.  This pressed for London wide changes, including polyclinics, and consulted on the reconfiguration of major trauma and acute stroke units in February 2009.  Four trauma units and eight hyperacute stroke units (HASUs) were established.  As a result of stroke reconfiguration virtually all patients who would benefit from thrombolysis got it (18%), three times more than in the country as a whole.

Individual subgroups worked at a more detailed level, as in the North East London Sector, looking at the precise positioning of stroke units, maternity services and children's units. In July 2009  the London PCTs agreed major service changes. 

2010 : The Conservative/Liberal Democrat Administration and the White Paper

Labour was defeated in the 2010 election and the new Secretary of State, Andrew Lansley, arrived with further organisational proposals he had developed and published while in opposition.

Landsley was antagonistic to proposals to restructure services, as in the case of London.  He immediately moved to embargo proposals imposing new criteria such as local support from the public and general practitioners.  Because the London SHA had been in advance of other authorities, it was particularly affected by this decision and important strategic plans were placed at risk.  The Chair, Sir Richard Sykes, previously chief executive of GlaxoSmith-Kline, resigned believing that the delay was politically driven and not driven by logic.  So did 4 non-executive directors and the Chief Executive, though the majority remained.   Many of the reconfiguration proposals such as those in North East London had emerged from a long process of clinical involvement and public consultation. Others, as at Chase Farm, were necessary and had been delayed for years by political and public dissent.  While some could be criticised, for example the belief that polyclinics would move up to half acute care into the community saving money, to delay restructuring at a time of financial crisis was questionable. Many of the trusts where restructuring was planned had financial problems and were also at risk of providing poor care.

A White Paper, Equity & Excellence, Liberating the NHS followed by a Bill foreshadowed further major structural reorganisation[20]. By 2013 the London SHA would disappear, alongside all others, and Primary Care Trusts would also be gone.  Commissioning functions would be transferred to clinical commissioning consortia   London's large number of comparatively small PCTs began to cluster and slim down.  The Labour policy that all trusts had to achieve Foundation Trust status was re-iterated and NHS London considered the many trusts that had not done so, examining how mergers might assist.. In many cases there were clear reasons why trusts had not previously achieved FT status and Monitor, that was not about to weaken its criteria, would remain a barrier.

Financial problems

McKinseys, who played a major role in the work of NHS London, had been commissioned by the Department of Health to examine NHS finances and its report, submitted in March 2009 and leaked in September 2009, suggested the need for swingeing economies both nationally and in the capital. 

The economic crisis inherited by the Coalition rapidly led to financial problems.  By 2011, as tariff payments were cut and activity was limited, most acute trusts in London were projecting an in-year deficit of 6-9%.  Monitor, responsible for approving FTs as financially and organisationally sound, found that few of the many not yet foundation trusts could clear the bar.  Some such as the Royal London were burdened by major PFI commitments (10% of the entire hospital PFI programme) that debarred it from meeting tests of financial stability.  Others had historic debts and a fund established to bail them out did not do so, the money being spent on meeting the bills the hospitals had run up because of increased activity.  NHS London confirmed that Newham University Hospital, Whipps Cross University Hospital, North West London Hospitals, West Middlesex University Hospital, Barnet and Chase Farm Hospitals, St George’s Healthcare, South London Healthcare, and Barking, Havering and Redbridge Hospitals trusts would all still have deficits at the end of 2011. In April 2011 Imperial College Health Care Trust, with a budget of £910 million, had a deficit of £40 million, and the Chief Executive and Finance Officer resigned.  The SHA believed that if acute trusts were left with their levels of deficits, London would end up with failing trusts with significant debt, which would result in performance failure, not only financially, but in patient care.

The increasing financial pressures, coupled with the view that some current hospital services should be "moved  into the community", led to proposals sometimes in apparent desperation.  In north east London the merger of Barts, the Royal London, Whipps Cross and Newham was proposed.  In north west London McKinsey's were asked to examine the configuration of services between Imperial College Healthcare Trust and West Middlesex University Hospital Trust, out of hospital care, to establish a more sustainable clinical and financial system.

Improving health and health care in London (December 2011) [22]

In the light of a difficult financial future and a challenging programme of organisational reform, the King's Fund took stock of the financial and policy landscape, the successes and unfinished business of Healthcare for London, and the loss of momentum through the decision to bring to an end the SHA. The financial situation, though dismal, was at least clear.  Policy was however uncertain. The detailed report gave  an account of the history of change in London, an assessment of the recent successes and an analysis of the capital and revenue problems.  The Fund thought that London, with a greater concentration of problems and financial difficulties than elsewhere, faced a strategic vacuum with no clear lead to coordinate services and drive through necessary changes.  Much had been accomplished in heart disease, stroke and trauma by having a central focus.  However the Fund said 18 hospitals were forecast to have a net deficit of around £170m by 2014, and many London trusts would struggle to meet the government’s deadline to become foundation trusts by 2014.  Only 16 of 42 London trusts were currently foundation trusts, with around half of the remainder unlikely to be financially viable in time to meet the deadline.  The fund considered alternative approaches to management in the future, but saw a reduction in the number of hospitals and political conflicts as inevitable.

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