What does the Lewisham Hospital decision mean for the NHS estate?

The health secretary, Jeremy Hunt, suffered what can only be described as a serious defeat in the Court of Appeal this month, when the Court upheld a High Court decision that he had acted outside his powers in ordering the closure of certain services at Lewisham Hospital.

The ruling attracted a lot of local press, as any threat to close local hospital services does, but it reiterates at a wider level how difficult it is to make strategic decisions about the configuration of healthcare services and facilities, and the complexity of the legal processes involved. All of this hinders investment in the NHS estate at a time when a pipeline of capital projects could free up underused estate for disposal - the King’s Fund reports that over £4bn investment in the NHS estate is required to make it fit for purpose.

The background is this. The nearby South London Healthcare NHS Trust had been operating a longstanding £69m deficit on a £424m turnover. In accordance with the government’s tougher approach to financial accountability in the NHS, the then Health Secretary, Andrew Lansley, implemented the procedure under the NHS legislation to appoint a Trust Special Administrator (TSA) to oversee the administration of the Trust.

The TSA’s plan originally envisaged will not all be delivered in south London after all – well not until the other longer, more complicated consultation has been run

The TSA ran a consultation and duly produced a report on what should happen to the South London Healthcare NHS Trust. He recommended that it should be broken up and its three hospitals transferred to other nearby Trusts, including the Lewisham Hospital Trust. The new Health Secretary, Jeremy Hunt, agreed. No one is disputing this part of the TSA’s recommendations.

The dispute centres round the TSA’s further recommendation that to accommodate the transfer of one of the hospitals to the Lewisham Hospital Trust, certain services at Lewisham Hospital should be shut. The bottom line is that the Court of Appeal said that the drafting of the NHS legislation only gives the TSA the power to make recommendations (and the health secretary the power to implement them) in respect of the particular NHS Trust in administration, not other Trusts. The TSA couldn’t recommend any change to the services at Lewisham Hospital. To do that, the health secretary needed to follow an entirely different procedure under the NHS legislation, one with its own process and a much longer timeframe. So the savings that the TSA’s plan originally envisaged will not all be delivered in south London after all - well not until the other longer, more complicated consultation has been run.

This is important because it means it is much more difficult for the government to take action against failing NHS Trusts given the uncertainty about the process and powers of the TSA. In turn this means operational savings are reduced, which, in the end, can only mean less money for capital projects to improve the NHS estate.

Steven Carey is head of Construction and Engineering at Speechly Bircham LLP