South London Healthcare NHS Trust, which was created by the merging of three hospitals - The Princess Royal in Orpington, Queen Mary's in Sidcup and the Queen Elizabeth in Woolwich has been put into administration. The Secretary of State has the power to appoint administrators to trusts. The appointment process is known as a "special administration" The FSA also has power to appoint special administrators to financial institutions.
Mr Lansley who made the appointment said: "I have decided it is in the interests of the health service and, in particular, of the patients the trust serves." The trust was only created in 2009 and is millions of pounds in debt. When the hospitals were merged the annual deficit was c.£21m.
The trust cut costs, to reduce debt, by £47m in 2010-11, but still posted a £40m deficit.
The special administrator's role will take effect from 16 July and he will "assume full control of South London Healthcare NHS Trust, replacing the functions of the trust board and assuming the role of the accountable officer", the health secretary said.