University Hospitals Coventry and Warwickshire Trust was forced to leave the bidding process to run nearby George Eliot Hospital due to financial concerns, HSJ understands.

It is understood that Coventry and Warwickshire was advised last week by the NHS Trust Development Authority that its bid had failed to meet criteria relating to liquidity set by Monitor.

However, this surprised senior figures at the trust as the trust’s liquidity position is not expected to be an obstacle to its reaching foundation trust status over the longer term.

The bidding process for George Eliot was last year opened up to NHS trusts which could demonstrate that they are likely to reach foundation status, having previously been open only to foundation trusts and private firms.

The liquidity issue is believed to relate to historic debt at the trust, rather than Coventry and Warwickshire’s private finance initiative obligations, which take up about 15 per cent of turnover, and for which it receives no support from the government.

The procurement process is formally owned by George Eliot, but it is closely cooperating with the TDA on it.

A separate bid from South Warwickshire Foundation Trust is a “whole health economy” proposal, involving increased integration of acute and community services – the trust already provides the latter across the whole patch.

Coventry and Warwickshire and South Warwickshire already have a strong working relationship and already network some services, such as urgent care, paediatrics and maternity.  

The final shortlist for bidders is expected to be produced in mid March. The trust will name its preferred bidder in July.

Coventry and Warwickshire is the second organisation to drop out of the bidding process after private company Ramsey Healthcare pulled out in January.

In addition to South Warwickshire, two private health care companies are left in the bidding process – Circle and Care UK. South Warwickshire formed a partnership with Serco in 2012 when both organisations were considering bidding to take over George Eliot. However, South Warwickshire submitted a bid independently of the firm.

A TDA spokeswoman said: “[Coventry and Warwickshire] took the strategic decision to withdraw to focus on their own future sustainability and foundation trust application, building on their recent progress in improving performance and care quality. The procurement process was not right for them at this time.

“All bidders’ proposals are subject to the same rigorous assessment process, whether they are an NHS organisation or an independent sector provider. This is to ensure options presented offer viable solutions to secure future sustainability and maintain high quality care services for local people at George Eliot hospital.”