News story

Final cost of trust special administration at Mid Staffordshire NHS Foundation Trust

Sending in special administrators to the country’s most troubled foundation trust took longer and cost more than originally planned.

The work of the trust special administrators (TSAs) to secure safe and sustainable services in Mid Staffordshire cost Monitor almost £19.5 million (including VAT) over 18 months.

This covers the work to find and implement a solution to the problems at Mid Staffs (£17.35 million), plus the full cost of having the TSAs running the hospitals at the same time (£2.15 million).

Monitor originally budgeted £15.25 million for the work but the timescale was extended twice. First to ensure that local NHS bodies agreed to all the recommendations made in the TSAs’ report, and second to agree funding needed to implement the solution.

The regulator has brought forward the publication of these figures in response to a pending parliamentary question. Monitor plans to publish a detailed breakdown of the costs, alongside a report setting out some of the lessons learned, in due course.

During the course of special administration, Mid Staffordshire NHS Foundation Trust paid EY, the team supporting the TSAs, for additional professional services work costing £3.35 million, including VAT. This work was needed because the trust did not have the specialist staff required.

Dr David Bennett, Chief Executive at Monitor, said:

Mid Staffs was failing its patients and relying on tens of millions of pounds of emergency funding from central government each year. If nothing had been done the trust would have been £100 million in debt by 2018.

Our priority was securing safe and sustainable services for the people of Staffordshire, and while special administration took longer than expected it nevertheless led to substantial investment in local health services.

However, trust special administration remains a last resort for failing NHS providers. What we have learned from our experience is that the solution to a struggling provider lies as much within the local health economy as in the failing institution itself.

We are already taking a swifter and more cost effective approach to dealing with other challenged local health economies. In areas like Milton Keynes, King’s Lynn and Tameside in Greater Manchester, our focus is now on working closely with other NHS bodies to find local solutions and bring about the improvements needed.

Monitor plans to bring as much of this work in-house as possible in order to reduce the cost of similar work in the future.

Additional information about the final costs:

  • all the figures above include VAT because they reflect the bills that Monitor and the trust have paid and will be declared as such in the accounts; however, the net cost of the process to the taxpayer would exclude VAT
  • the Contingency Planning Team, which preceded the TSA, cost £2.7 million, including VAT
  • the first phase of trust special administration cost £9 million, including expenses and VAT; this paid for a team of experts to run the trust, up to 30 staff designing the future of services and a large public consultation
  • the second phase cost £10.5 million, including expenses and VAT; this included continuing to employ a team of experts to run the hospitals and a team of up to 50 people implementing the TSAs’ recommendations
  • in March 2014, Monitor estimated that the work would cost between £12 million and £15 million, these figures did not include VAT; including VAT our projections would have been £14.4 million to £18 million
  • the extra paid to EY by the trust was reviewed by Monitor and reimbursed by the Department of Health; it covered the cost of services that the trust itself could not provide