North by North West: Virgin deal exposes council rifts

In this week’s North by North West:

• Legal wrangles in Lancashire betray the poor relationship between the NHS and county council  
• As McKinsey figures out the future of commissioning, a staff survey raises difficult issues in Manchester
• The Christie is set for a £28m windfall from national sustainability funding
• An estates masterplan for Warrington and Halton Hospitals

Immature relations

A disputed tender process in Lancashire reveals much about the undeveloped relationship between its NHS organisations and county council.

They are, of course, all meant to be collaborating partners within the sustainability and transformation plan, but Lancashire County Council, Lancashire Care Foundation Trust and Blackpool Teaching Hospitals FT have ended up in the high court over a children’s public health contract.

It comes after the council awarded a £21m a year contract to Virgin Care in December, with the incumbent NHS trusts (which previously held the contracts under the old primary care trusts) missing out.

Around 160 staff will be affected, in services such as health visiting and school nursing, with the trusts also arguing that the removal of the contract will undermine other services.

In one sense, the legal wrangling is unsurprising. The council was bound to tender the contract under procurement regulations, and the NHS organisations are doing everything they can to keep hold of them.

But this is the sort of dispute the STP process is supposed to steer us away from.

If the trusts and the council felt like genuine partners, then there would arguably be a higher level of confidence that the council had run a proper tender process.

Or perhaps the council would have accepted the trusts’ concerns over the impact on their other services, and not sought to initiate the new contract before the legal challenge was exhausted (Unusually, LCC tried to remove an automatic interim suspension order, which pauses the process until the challenge is concluded).

Blossom on top

Council/NHS relations seem be much better in Manchester, where the clinical commissioning group and city council effectively want to merge into a single “strategic commissioner” (McKinsey has been brought in to figure out exactly what that means).

But while the relationship blossoms on top, the findings of a staff survey in November suggest that life within the organisations isn’t so rosy.

Although most staff said the CCG and council were good places to work, and were optimistic about the integration, a significant and increasing number (17 per cent) reported bullying and harassment from colleagues.

Stress levels were high and less than half of employees felt confident that senior managers would act on the survey results.

If Manchester is going to represent the future of health and social care commissioning, then let’s hope the actions put in place following the survey (including an ‘employee voice group’) will be sufficient to deal with these issues.

Another windfall for Manchester

Manchester was one of the main beneficiaries of the “sustainability and transformation fund” in 2016-17, and the city is going to be quids in again this year.

The Christie is forecasting a £28m windfall from the STF pot (against its allocation of £1.5m) because it’s expecting to better its control total by a similar amount.

The trust doesn’t have any land sales in the pipeline, so I suspect its dramatic improvement against plan has something to do with an estimated insurance settlement following last year’s fire. Confirmation is expected in the next couple of months at which point the trust will be able to set out a formal position. 

The trust will clearly incur additional costs to replace the research facility, but the additional STF (which is triggered when trusts do better than plan) would essentially be free money.

This obviously works out very nicely for The Christie, but will raise further questions about the equity and fairness of the STF regime, which is supposed to reward genuine efficiency savings.

Warrington’s master plan

There aren’t many trusts in the north of England with much potential for generating capital receipts, but Warrington and Halton Hospitals Trust should have more opportunity than most.

It has recently published plans to demolish the 1970s Halton General Hospital, in Runcorn, and replace it with an “health and wellbeing campus”.

The Cheshire and Mersey Treatment Centre – a money-spinning orthopaedic factory – will also be extended under the scheme.

The new buildings would be spread over a much smaller footprint, releasing surplus land for a major housing development.

A similar strategy could also be applied to Warrington Hospital, which is also spread over a large footprint in the town centre and needs to be replaced.

The trust will have to get its hands on capital investment first though. It is hopeful of securing £40m in the next wave of STP cash from NHS England for the Runcorn scheme, but Warrington is likely to be a much slower burn.

Contact me in confidence

Please get in touch if you know about something I should be writing about, or with any other comments on the newsletter. You can contact me in confidence by email: lawrence.dunhill@wilmingtonhealthcare.com, or by phone on 0207 6089058. I also talk about this stuff more regularly on Twitter - here.