The most financially challenged NHS Trust in England is to be dissolved by October, the health secretary Jeremy Hunt has announced. 

Hunt said that previous attempts to solve the financial problems at South London Healthcare NHS Trust “have failed”. 

Currently, the Trust is losing more than £1 million every week and by the end of this year, is expected to have an accumulated debt of more than £200 million, according to the government.

Speaking this week the health secretary said a number of changes will happen at the Trust, including:

•    The Trust will be dissolved, with each of its hospitals taken over by a neighbouring hospital trust.  These mergers are subject to approval from the relevant regulators.

•    All three hospitals within South London Healthcare NHS Trust – Queen Elizabeth Hospital in Woolwich, Queen Mary’s in Sidcup and the Princess Royal in Bromley – will be required to make the full £74.9 million of efficiencies identified by the Trust special administrator.

•    All vacant or poorly utilised premises will be vacated, and sold where possible.

•    The Department will pay for the excess costs of the PFI buildings at the Queen Elizabeth and Princess Royal Hospitals and write off the accumulated debt of the Trust so that the new organisations are not saddled with historic debts. It will also negotiate an appropriate level of transitional funding to cover implementation.

But based on the advice of NHS medical director Professor Bruce Keogh, Hunt has said that Lewisham Hospital should retain its A&E department, despite previous reports that it may go.

On the basis of Sir Bruce’s advice, Hunt has accepted his recommendation to centralise specialist emergency care at four sites in South East London, because he believes this will “significantly improve the quality of care and save the lives of up to 100 patients a year”.

Lewisham Hospital will retain its ability to admit patients with less serious conditions, and will continue to have 24/7 senior medical emergency cover, allowing it to remain open as a working A&E department treating up to 75% of the patients who currently use it.

Hunt has agreed that the Trust special administrator should proceed to implementation, with South London Healthcare NHS Trust expected to be dissolved between June and October this year.

Health secretary Jeremy Hunt, said: “The longstanding problems at South London Healthcare NHS Trust must not be allowed to compromise patient care in the future.  Hundreds of millions of pounds have been spent on paying for debt rather than improving patient care for the local community in South East London.

“What is in the clinical interests of patients in South East London has been at the heart of my decision making process, and as a result I have followed clinical advice to keep open the A&E in Lewisham.

“However, some changes need to be made so that money is spent on patient care rather than servicing historic debt. The decisions I have taken today will ensure that and that patients in South East London will be able to rely on the NHS for years to come.”

Reconfiguration of this kind is backed by health think-tanks such as the King's Fund, and by the NHS Confederation, which is populated by NHS managers. The move, however, is expected to generate public obloquy given the emotive nature of closing down or limiting NHS services - there is already a 'Save Lewisham hospital' campaign that has gained a popular following on the social networking site Twitter.

Sir Bruce Keogh, NHS Medical Director said: “Healthcare in South East London is at a turning point.  We need to strike the right balance between ensuring that all patients have access to the best possible specialist treatment whilst providing safe, effective and convenient services close to home.

“I expect that balance to result in about three quarters of patients currently seen in Lewisham A&E continuing to receive complete care at Lewisham Hospital and about a quarter being transferred for more specialist treatment elsewhere.”