Acute trusts' FT plans slip back a year

Of the 71 non-FT acute trusts, 19 have submitted dates for an application to Monitor which show an average delay of 14.2 months compared with their estimates from this time last year.

Fourteen trusts now plan to merge or have this route earmarked as an option. Twenty-two are awaiting the results of a review of their private finance initiative schemes after these were labelled by the Department of Health as an “obstacle” to FT status.

Just 10 organisations have made initial applications to the DH or are being assessed by Monitor. Only five acute trusts have been authorised since May 2010.

Ensuring all NHS providers attain foundation trust status by April 2014 is a central aim of the Health and Social Care Bill. The process will be overseen by the NHS Trust Development Agency from July 2012.

Trusts had until the end of March to submit “tripartite formal agreements” to DH managing director of provider development Ian Dalton, setting out how they would achieve FT status and what milestones would be achieved along the way.

The agreements reveal that some trusts plan to submit applications to Monitor only 12 months before the April 2014 “drop-dead” date, leaving little time to prepare and submit another bid if the original one is rejected.

Portsmouth Hospitals and South London Healthcare trusts – both of which appear on the DH’s list of seven financially challenged trusts and are among the 22 having their PFI schemes scrutinised – have submitted agreements anticipating an FT application in April 2013.

Barts and the London, St George’s, Maidstone and Tunbridge Wells, Shrewsbury and Telford, and Surrey and Sussex  trusts are also planning to submit applications at this stage.

Mid Essex Hospital Services Trust plans to submit its FT application to the DH in February 2012. But as of 10 March it had no detailed and assessed savings plan in place for the year, and was in the process of replacing its chief executive, finance director, nursing director and medical director. A spokeswoman said the trust had now made appointments to all of those positions.

Monitor last week confirmed that some trusts may need to set efficiency savings of closer to 6 per cent compared with the 4 per cent assumed in the operating framework – making authorisation still more difficult for applicants.

This could mean some non-FTs being forced to rework their Monitor applications and long term financial models.

Putting the management of trusts out to a private franchise is implicitly among the options for those that cannot make FT status on their own or that have no potential merger partners.

Hinchingbrooke Health Care  in Cambridgeshire is still waiting for the DH to sign off its franchised to Circle, while two other trusts – Trafford Healthcare and the Royal National Orthopaedic Hospital in London – are considering private franchise.

HSJ understands private franchise status would allow trusts to avoid having to meet the April 2014 FT deadline.

The analysis also shows that smaller, specialist trusts are likely to be swallowed up.

The Royal National Orthopaedic Hospital Trust has listed options in its agreement that, along with private franchise and becoming a social enterprise, also include a merger or 
acquisition. The Royal National Hospital for Rheumatic Diseases FT is working on a merger with Royal United Hospital Bath Trust, an aspirant FT, while Nuffield Orthopaedic Centre’s merger with Oxford Radcliffe Hospitals Trust is still in progress.

Oxfordshire Learning Disability Trust, which has a turnover of roughly £40m, is due to decide over the next fortnight whether its preferred route is merger and acquisition or becoming a social enterprise. Along with the Royal National Orthopaedic and Nuffield Orthopaedic Centre, the Oxfordshire trust was anticipating a future as an independent foundation trust this time last year.

A spokeswoman for the specialist Queen Victoria Hospital Foundation Trust in West Sussex, which has a £54m turnover, this week confirmed it had ruled out merging with Brighton and Sussex University Hospitals Trust and Guy’s and St Thomas’ FT in London.

One senior figure involved in provider development work told HSJ that there were probably more announcements to come on merger and acquisition.

He said: “There are some organisations which are not wanting to rock the boat and have primary care trust sign-up to [look at] it quietly. I am not sure the strategic health authorities are being as rigorous [in forcing decisions through] as you might expect.”

Writing in HSJ last month, Audit Commission managing director of health Andy McKeon and NHS Confederation acting chief executive Nigel Edwards urged caution about mergers in the acute sector, saying: “The belief that the next merger will be the one that bucks the trend and produces radical cost savings and efficiency gains is widely held, but is close to being delusional”.