A second district general hospital trust has ruled out being run by a private company under a franchise agreement.

Weston Area Health Trust has ruled out being run by a private company under a franchise agreement.

It is the second of the small number of trusts - for which this type of agreement had been an option - to rule it out so far this year.

The district general hospital trust in Somerset announced this morning that it would not pursue the arrangement, which is only currently operating at Hinchingbrooke Health Care Trust in Cambridgeshire, run by private partnership Circle Health.

Weston - a £97m turnover organisation - was declared unviable as an independent organisation by the former health secretary Andrew Lansley in 2011. It has been investigating different options for its organisational form, including a private franchise.

The trust will now merge with or be acquired by an NHS or foundation trust within 50 miles of it, it announced.

Taunton and Somerset Foundation Trust and University Hospitals Bristol Foundation Trust have long been viewed in the area as the most likely partners for Weston, with the Taunton board understood to be particularly interested.

George Eliot Hospital Trust in Warwickshire had also previously been investigating a private franchise option, but abandoned the idea in March.

In 2011, private franchises were being considered for Whiston Hospital in the north west, Epsom Hospital in Surrey, London’s George Eliot Hospital, and the Royal National Orthopaedic Hospital in Hinchingbrooke. Only Hinchingbrooke went ahead with the agreement.

Weston’s decision leaves Peterborough and Stamford Hospitals Foundation Trust as the only trust where a private franchise is known to be an option under consideration.

The model may be being supplanted by the concept of “hospital chains”, the prospects for which are currently being investigated for the government by Salford Royal Foundation Trust chief executive Sir David Dalton.

Weston chief executive Nick Wood said in a statement today: “Our belief, shared by local commissioners and the NHS [Trust Development Authority], is that ‘NHS only’ will keep our improved performance trajectory on track and maintain high levels of clinical and patient care. Looking to the long term future, it’s also the best option to provide sustainable services for the local population and our staff who care for them.”

The TDA’s director of delivery and development for the south of England, Stephen Dunn, led the introduction of the franchise at Hinchingbrooke when working at the former East of England Strategic Health Authority.

Professor Dunn said in today’s statement: “As [Weston] works to get to grip with issues like the need to provide a broad range of services seven days a week, a solution which sees them merging quickly with or being acquired by another NHS organisation will put them in the best position to respond to patients’ needs.”

The announcement said a decision on which organisation would partner with the trust would be made by the end of October and a transaction completed by April 2015.