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A "significant deterioration" in leadership at an NHS trust probably had a "knock-on effect" on its standard of services, a watchdog has found.
Inspectors found staff felt encouraged to "turn a blind eye" to bullying in hospitals run by the Newcastle Hospitals NHS Foundation Trust.
The Care Quality Commission (CQC) downgraded the trust's overall rating to "requires improvement".
The trust said it "fully accepts" the report.
Bosses at Newcastle Hospitals NHS Foundation Trust said recommendations were being worked on "as a matter of urgency".
'Inadequate' leadership
Inspections were carried out between June and September in surgery, services for children and young people, and medical care at the Freeman Hospital and the Royal Victoria Infirmary (RVI), as well as maternity services and urgent and emergency care at the RVI.
The trust's patient transport service (known as NECTAR) was also inspected.
A report released on Wednesday saw its overall rating decline from "outstanding", which it was awarded in 2019, to "requires improvement".
How "well-led" the trust was declined from "outstanding" to "inadequate".
"Safety" dropped from "good" to "requires improvement", "effective and responsive" declined from "outstanding" to requires "improvement", while "caring" dropped from "outstanding" to "good".
'Unacceptable'
Ann Ford, CQC's director of operations in the north, said: "We found a significant deterioration in how well the trust was being led.
"Our experience tells us that when a trust isn't well led, this has a knock-on effect on the standard of services being provided to people.
"Some staff told us that bullying was a normal occurrence, and they were encouraged to 'turn a blind eye' and not report this behaviour.
"This is completely unacceptable."
The CQC said they will continue to monitor the trust and will return to carry out another inspection.
Analysis by Sharon Barbour, BBC Look North Health Correspondent
For years Newcastle Hospitals proudly displayed its "outstanding" rating. The Freeman is world-renowned for its cardiac work, and the RVI was the first to treat Covid patients in the UK.
Behind the scenes, however, serious problems were brewing - particularly in the cardiac surgery unit, which is where the CQC began to focus its attention.
Whistleblowers reported bullying, some around safety concerns, and there were claims and counter claims. It is the leadership which has come in for the harshest criticism, and not only because of failings in managing the cardiothoracic unit.
Now there is new boss, Sir Jim Mackey. His priority is changing the culture.
He's also planning to sort IT issues, which meant thousands of clinical letters to GPs were not sent out.
Newcastle Hospitals is not the only trust struggling to keep hold of fine ratings. Covid, strike action, A&E delays, staffing, funding and social care shortages are all leaving trust bosses with a lot to fix.
The report is very bad news for staff - but the rating for caring, well that was "good".
'Working together'
Newcastle Hospitals' new chief executive, Sir James Mackey, said: "We fully accept the CQC's reports.
"Their clear recommendations for attention and improvement are being worked on as a matter of urgency and I am confident we can fix this by working together across the organisation and focussing on what matters to patients and staff."
The trust said they have put in an improvement programme, which included having an "open and honest" incident reporting system.
A further targeted inspection took place in the cardiothoracic surgery department at the Freeman Hospital in September, in response to concerns raised by whistleblowers regarding the culture, specifically about bullying and harassment and safety concerns.
The watchdog said trainees felt the atmosphere in theatres was "toxic" and "disrespectful of them, and others".
No new rating came from that inspection, but the trust has since updated their action plan to include specific actions in relation to culture, the CQC said.
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